Portugal will be in the group of “Recipient” countries, whose debt the ECB must buy with the “new tool” – Observer
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Portugal, Italy, Spain and Greece are the four countries that belong to the group of receivers, in a division that the European Central Bank (ECB) had made while preparing the launch of the new tool to combat the also pronounced rises in the interest rates of the debt of some countries. This means that these will be the four countries whose debt the ECB will be able to buy, or buy with more.
According to information transferred to Bloomberg by ECB sources, the central bank is defined as three groups where, in addition to the “receivers“, there is the group of “donors” – the latter are countries that will tend to have fewer purchases made by the ECB on their debt. Germany, France and the Netherlands are in this group.
There is also a third group, theneutral“, where there is no pre-definition on whether it will be more or less benefited by the new debt maturity date that the ECB should buy to announce on July 21, the day of the next periodic meeting of the authority.
Emergency country debt will be used to purchase country debt that will be granted under the PE Purchase Program (PP) that has been granted in debt repayments in recent years under the Pandemic Purchase Program ( PP).
What came out of Sintra: Governments must be careful with spending to offset inflation
Christine Lagarde assured in Sintra, in recent days, that the ECB will be able to create such a “new tool” and, with it, capable of not having divergences in the costs of different countries. However, this French program will guarantee “sufficient safeguards” for controls to maintain control of public accounts.
It is not clear exactly how these safe “safeguards” will be defined as instruments, but recent speeches by ECB officials, including Mário Centeno, suggest that the new could function as a “never” that, at the limit, could never be used to make concrete purchases of public debt – its existence would be enough to bring about “discipline” in the debt markets. In these terms, the instrument can be similar to the OMT program (Outright monetary transactions), announced by Mario Draghi in 2012.
Essentially, which was never used, it implied, however, that countries whose debt was purchased by the ECB made a commitment to balance public accounts or a structural reform program (it would have to be approved by the European Stability Committee). In other words, the OMT involved a concrete “conditionality”. Centeno indicated that it will be different here, but Lagar that it is not very real like.