Outright Monetary Transactions

The new tool being promoted to shield southern European countries as interest rates may rise "not need to be used if it is strong enough to persuade investors not to try it".

This is what the governor of the Bank of Greece and member of the Board of Directors of the European Central Bank, Giannis Stournaras, said in a televised interview with Bloomberg.

The European Central Bank confirmed on Thursday that it would end a long-running scheme to pour billions of euros into the Eurozone economy on July 1st by buying bonds and signaled a series of interest rate hikes as early as next month as it fights persistently high inflation.

The significant boost provided by the European Central Bank's emergency bond-buying program (PEPP) to Greek state bonds is set to come to an end, a development that may be painful for some eurozone economies.

The Greek bond market's reaction will be interesting, though as is the case with any QE program, the biggest challenge will be which exit strategy the ECB will choose.

The European Central Bank has acquired 4.69 billion euros of Greek bonds since it launched its emergency bond-buying program in late March to support the eurozone in the face of the coronavirus pandemic.

The European Central Bank (ECB) is drafting contingency plans to carry out its multi-trillion bond-buying program without the Bundesbank in case Germany's top court forces the main participant in the scheme to quit, four sources told Reuters.

A legal wrangle over the European Central Bank's bond-purchasing program will help focus minds on the need for closer European integration, Greek central bank chief Yannis Stournaras said on Tuesday.

While all of Europe is taking a socio-economic beating the German Federal Court of Justice opined that the bond-buying programme of the European Central Bank that emerged after the last debt crisis is in part unconstitutional and touches on the principles of the German (Federal) Constitution.

The current crisis is threatening to tear apart the European construct and project.

"You…. start your term with … a system in need of reassurance that Outright Monetary Transactions (OMT) are ready to be used, if need be." This is what we said in July 2019 when we wrote the memo to the incoming ECB president.* What we did not know back then is just how quickly she would have to contemplate the need.

European Central Bank President Mario Draghi on Thursday put a definitive end to any hopes of Greece's inclusion in the bond-buying program (QE) and the extension of the waiver that allows Greek debt to be accepted as collateral for regular auctions of ECB cash, despite the junk rating of Greek bonds.

Greece would be admitted in the European Central Bank’s (ECB) quantitative easing (QE) program only when the EU institutions and the International Monetary Fund (IMF) agreed on the implementation of debt relief measures after 2018, said the European Central bank (ECB) President Mario Draghi.