Europe gets new blast of stimulus to counter virus surge
Friday, 12 11 2020, Category: Economy, Country: Europe
The European Central Bank unleashed another half-trillion euro ($600 billion) wave of stimulus as a winter surge in COVID-19 infections shuts down large parts of the economy and wipes out pre-Christmas sales revenue ahead of the region’s most important holiday.
The 25-member governing council decided Thursday to increase its bond purchase stimulus by 500 billion euros, to 1.85 trillion euros ($2.2 trillion). It will extend the duration of the program until at least March 2022 instead of the current earliest end date of mid-2021. It also expanded its offerings of ultra-cheap loans to banks.
The bond purchases help keep credit affordable and available across the economy for consumers, businesses and governments. That is critically important to help businesses survive until the pandemic eases, and to support governments that are borrowing heavily to pay for aid to businesses and workers.
ECB President Christine Lagarde said that activity in services businesses was being “severely curbed” by the recent rise in COVID-19 cases, and that recent economic data “suggest a more pronounced near-term impact of the pandemic on the economy and a more protracted weakness in inflation than previously envisaged.”