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The European Central Bank may already say something about phasing out aid in its interest rate decision

The European Central Bank (ECB) will make another interest rate decision on Thursday afternoon. Investors and economists are particularly curious about the central bank’s view of the economic outlook for the Eurozone. The ECB may also release something about phasing out support programs, which will undoubtedly happen at some point.

No policy changes are currently expected from the European Central Bank. Due to the lockdowns against Corona, the Eurozone economy still needs a lot of support. As long as the economy does not recover sufficiently, it will not be possible to remove the support measures, as Christine Lagarde, President of the European Central Bank recently indicated.

According to Klaas Knot, president of De Nederlandsche Bank (DNB), the European Central Bank should start reducing debt purchases after the summer due to the crisis. In an interview with Reuters news agency earlier this month, Knot said it makes sense to gradually remove subsidies from the third quarter. The node indicated, for example, the prospects for economic growth and inflation.

In the previous interest rate decision in March, policymakers at the European Central Bank decided to significantly accelerate the rate of bond purchases. The aim was to curb excessive increases in interest rates in the financial markets. This was related to the strong stimulus measures in the United States. But it now appears that things have settled somewhat in this area.

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