ECB must keep money taps fully open as crisis not over - ECB policymaker Stournaras

Reuters reports that ECB policymaker Yannis Stournaras said that the European Central Bank must keep its money taps fully open, as the euro zone economy is still in the throes of the coronavirus pandemic despite progress in vaccination campaigns.

ECB rate-setters will review the pace of emergency bond purchases at their June 10 meeting against an improved economic backdrop. Growth and inoculation rates are rising in the bloc as COVID-19 cases fall.

However, Stournaras said the recovery remained fragile and, with no evidence to point to an era of high inflation in the foreseeable future, it was too early for the ECB to slow down emergency bond purchases.

With inflation forecast to stay below the ECB's 2% target for years to come, Stournaras supported continuing the ECB's 1.85 trillion euro Pandemic Emergency Purchase Programme (PEPP) at its current clip.

"I don't see any reason to make any change (to the pace of PEPP) at the moment," he said.

Stournaras said the time for giving up PEPP, which is set to run at least until March 2022, hadn't come yet.

"I don't think the time is right to do this shift yet," he said. "Of course, at some point in the future this will occur, there's no doubt about that. We have to think about a smooth transition from PEPP to APP."