Pandemic Emergency Purchase Programme (PEPP)

The ECB’s pandemic emergency purchase programme (PEPP) is a non-standard monetary policy measure initiated in March 2020 to counter the serious risks to the monetary policy transmission mechanism and the outlook for the euro area posed by the coronavirus (COVID-19) outbreak. This programme complements the asset purchase programmes we have had in place since 2014.

The PEPP is a temporary asset purchase programme of private and public sector securities. The Governing Council decided to increase the initial €750 billion envelope for the PEPP by €600 billion on 4 June 2020 and by €500 billion on 10 December 2020, for a new total of €1,850 billion. PEPP expansion will further ease the general monetary policy stance, ensuring that all sectors of the economy can benefit from supportive financing conditions that enable them to absorb this shock. This applies equally to households, firms, banks and governments.

All asset categories eligible under the existing asset purchase programme (APP) are also eligible under the PEPP, as well as a waiver of the eligibility requirements has been granted for securities issued by the Greek Government. In addition, the Governing Council decided to expand the range of eligible assets under the corporate sector purchase programme (CSPP) to non-financial commercial paper, making all commercial papers of sufficient credit quality and remaining maturity of at least 28 days, eligible for purchase under CSPP. All kinds of purchases help boost spending and investment, with the aim of supporting economic growth.

Purchases under PEPP are conducted in a flexible manner over time, across asset classes and among jurisdictions, on the basis of market conditions. The flexibility of purchases will contribute to effectively stave off risks to the smooth transmission of monetary policy to the real economy. Finally, the maturing principal payments from securities purchased under the PEPP will be reinvested until at least the end of 2023.

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