Policy reactions to the Eurozone crisis

Increased liquidity requirements amid the coronavirus pandemic contributed toward the increase in Greek bank' dependence on European Central Bank funding.

Eurozone finance ministers agreed on Friday to offer cheap credit lines that can be tapped until the end of 2022 by countries hit by the coronavirus pandemic, two European officials said.

"All agreed. The program can be used until the end of 2022," one of the officials said.

The European Central Bank (ECB) is not expected to take additional measures and could implement a "wait-and-see" policy amid the coronavirus crisis, according to economists.

The European Central Bank took more emergency action Tuesday to keep credit flowing to companies in the 19 countries that use the euro by easing its rules for lending to banks that serve those businesses.

Southern European government bonds rallied on Thursday, with yields on Italian and Greek debt tumbling after the European Central Bank announced the terms of its 750 billion euro bond-buying scheme to limit the impact of the coronavirus crisis.

Eurozone finance ministers will discuss European Commission proposals to make use of the bloc's bailout fund to fight the economic impact of the coronavirus pandemic in a teleconference on Tuesday evening, the Commission said.

Greek borrowing costs fell sharply on Thursday following the European Central Bank's (ECB) decision to include Greek government bonds in an emergency assets purchases program.

The ECB triggered new bond purchases worth 750 billion euros ($816.90 billion) at an emergency meeting late on Wednesday to stop a pandemic-induced financial rout from shredding the euro zone's economy.

"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.

The European Stability Mechanism (ESM) on Thursday announced that the Board of Directors of the European Financial Stability Facility (EFSF) decided to reduce to zero the step-up margin due from Greece for the period between 17 June 2019 and 31 December 2019, as part of the medium-term debt relief measures agreed for the country.

Germany's benchmark 10-year bond yield fell slightly on Wednesday to below a recent three-month high, as the European Central Bank resumed its asset-purchase program and investors awaited the outcome of a US Federal Reserve meeting.