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- ECB member hints at scaling back stimulus but not everyone’s convinced
ECB member hints at scaling back stimulus but not everyone’s convinced
CNBC reports that ECB member Jens Weidmann has said the massive coronavirus stimulus program should be scaled back “step-by-step,” but others are worried about a premature lifting of the measures.
“I see two prerequisites for completely ending net purchases under the PEPP,” Jens Weidmann, a hawkish member of the ECB, said.
These would be the total removal of Covid-19-related restrictions, such as social distancing and a solid economic recovery, he added.
However, the path of the pandemic is uncertain and, despite strong economic data in recent weeks, there are concerns that a premature lifting of the stimulus would undermine the economic recovery even further.
To avoid this so-called “cliff-edge” situation, Weidmann called for the scaling back of pandemic-related stimulus “step-by-step.”
“Due to the still existing uncertainty, we cannot determine the exit from the monetary policy crisis mode far in advance. In order not to have to end the PEPP suddenly, however, the net purchases could be reduced step by step in advance,” Weidmann said.
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