(Bloomberg) --
The European Central Bank dived into the fight to save the economy from the coronavirus with 34 billion euros ($37 billion) of bond purchases last week.
The ECB settled 30.2 billion euros of buying under its new Pandemic Emergency Purchase Program, and added 4 billion euros under its existing Asset Purchase Program.
It also skewed purchases toward Italy. A breakdown for the month of March showed it bought 11.9 billion euros of Italian sovereign bonds under the APP, far more than normal for the euro area’s third-largest economy. The heavily indebted nation has been especially badly hit by the disease, and concerns over how it’ll finance its fiscal response had caused bond yields to rise, awaking memories of the 2012 debt crisis.
The ECB data only covers purchases that have been settled, meaning purchases initiated on Thursday and Friday last week wouldn’t typically be counted yet. The 750 billion-euro pandemic buying program started on March 26, and national figures for that program aren’t published.
Overall, the central bank plans to pump more than 1 trillion euros into the economy this year alone as Europe faces the deepest recession in decades. The pandemic program is particularly powerful, as it gives policy makers broad discretion to temporarily skew purchases toward member states that need liquidity most.
Still officials have warned that their monetary stimulus, which should push government borrowing costs lower, must be complemented by fiscal action. European Union finance ministers are due to discuss policy options on Tuesday.
©2020 Bloomberg L.P.
