(1)

Taking into account the exceptional economic and financial circumstances associated with the spread of coronavirus disease 2019 (COVID-19), the Governing Council established a new temporary pandemic emergency purchase programme (PEPP) under Decision (EU) 2020/440 of the European Central Bank (ECB/2020/17) (1). The PEPP includes all the asset categories eligible under the European Central Bank’s expanded asset purchase programme (APP), which comprises the secondary markets public sector asset purchase programme, the third covered bond purchase programme, the asset-backed securities purchase programme, and the corporate sector purchase programme.

(2)

On 4 June 2020, the Governing Council decided, in line with its mandate to ensure price stability, to revise certain of the PEPP’s design features. These revisions are aimed at ensuring the necessary degree of monetary accommodation as well as a smooth transmission of monetary policy over time, across asset classes and among jurisdictions, thereby contributing to offset the exceptionally steep and rapid pandemic-related deterioration of the expected inflation path.

(3)

Specifically, the Governing Council decided to increase the overall separate envelope for the PEPP by EUR 600 billion to a total of EUR 1 350 billion. In response to the pandemic-related downward revision to inflation over the projection horizon, the PEPP expansion will further ease the general monetary policy stance, supporting funding conditions in the real economy, especially for businesses and households. The purchases will continue to be conducted in a flexible manner over time, across asset classes and among jurisdictions. This will make it possible to effectively stave off risks to the smooth transmission of monetary policy.

(4)

In addition, the Governing Council decided to extend the intended horizon of net purchases under the PEPP until at least the end of June 2021, or beyond, if necessary, and in any event until the Governing Council considers that the COVID-19 crisis phase is over. The extension of the minimum purchase horizon aligns the net purchase phase with the expected duration of the most severe COVID-19 related restrictions on normal economic activity and corresponding weak inflation pressures.

(5)

To avoid the risk of an unwarranted tightening of financial conditions at a time when the recovery from the pandemic shock is likely to remain incomplete, the Governing Council decided that the maturing principal payments from securities purchased under the PEPP will be reinvested in full until at least the end of 2022 and, furthermore, that, in any case, the future roll-off of the PEPP portfolio will be managed in such a way as to avoid interference with the appropriate monetary stance.

(6)

Therefore, Decision (EU) 2020/440 (ECB/2020/17) should be amended accordingly,