The European Central Bank is gearing up to roll back some of its humongous emergency pandemic support for the economy.
This move is primarily driven by the recent resurgence of economic health and business activity. The preparedness of customers to spend has improved significantly and there are signs of a rebound across the 19 countries that use the euro.
Speaking on the changes, Bank head Christine Lagarde trod carefully, referring to it as a “recalibration” of existing stimulus. She also indicated that the changes do not signal an end to the pandemic support.
Based on a resolution reached Thursday by the bank’s 25-member governing council, the bank is set to carry out its bond-purchase stimulus at “a moderately slower pace” than the past few months.
On the eurozone economy, Lagarde stated that the recovery being experienced is “increasingly advanced,” adding that this trend puts the region on track to return to pre-pandemic activity by the close of 2021. She, however, noted that the road to full recovery is still long as trends like job loss persist.
Thursday’s decision arrives as we approach governing council deliberations on how and when to phase out the program, which is planned to continue at least through March 2022.
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