ECB Chief Says Governing Council Never Discussed Helicopter Money
April 22 2020 - 3:28AM
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European Central Bank President Christine Lagarde said the
Governing Council has never discussed the issue of helicopter
money.
In a reply to Philippe Lamberts, member of the European
Parliament, she reaffirmed that the ECB has not adopted a formal
position on the matter.
"It should be noted that the term helicopter money has been
associated with a wide range of policy proposals," Lagarde
said.
"In many cases, these proposals do not fully address the
associated operational, accounting and legal complexities nor
provide a comprehensive cost-benefit analysis of the full economic
and monetary impact," she added.
In another letter to Marco Zanni, an MEP member, Lagarde said
the ECB cannot lend directly to governments.
The Treaty on the Functioning of the European Union prohibits
the ECB as well as other national central banks of member states
from purchasing debt instruments directly from central governments,
Lagarde pointed out.
The aim of the provision is to encourage the member states to
follow a sound budgetary policy, she said.
"The Treaties have been understood to mean that primary market
purchase of government debt, i.e. the direct financing of
governments, would undermine the capability of this objective to
encourage such disciplined budgetary policy," Lagarde said.
The ECB has currently committed to provide more than EUR 1
trillion on public and private debt this year.
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