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Scale of the ECB new programme and willingness to raise limits show new determination, in the opinion of economists at ABN Amro.

Key quotes

“The new programme is big. It dwarfs its current asset purchases. Its new Pandemic Emergency Purchase Programme (PEPP) will total EUR 750bn, with purchases conducted until the end of 2020.”

“The ECB signalled a determination to do more if necessary. In its statement the Governing Council  signalled that ‘it is fully prepared to increase the size of its asset purchase programmes and adjust their composition, by as much as necessary and for as long as needed’.”

“We expect GDP to fall by 2.7% this year. We are assuming extra discretionary fiscal stimulus of around 1.2% GDP. That would tend to add half as much to growth. So the macro stimulus so far is around 1% GDP. Both the ECB and governments will likely need to do more.”