The European Central Bank is set to unleash more stimulus for the eurozone at its last meeting of the year on Thursday, as the region’s battered economy grapples with a second coronavirus wave.
ECB chief Christine Lagarde in October all but promised that extra support was on the way, when she said the Frankfurt institution would “recalibrate” its instruments in December.
The ECB will also unveil fresh economic forecasts likely to have been revised downwards after a spike in virus cases forced renewed shutdowns across Europe, although the prospect of mass vaccinations from next year could brighten the longer-term outlook.
Analysts widely expect the ECB’s governing council to add another 500 billion euros ($600 billion) to its 1.35-trillion-euro pandemic emergency bond-buying program (PEPP), and extend it beyond the current deadline of June 2021.
The purchases are aimed at keeping borrowing costs low to encourage spending and investment and bolster economic growth.
The ECB could also offer more ultra-cheap credit to banks for longer under a scheme known as TLTROs, whereby banks get loans at highly favorable interest rates in return for lending on to the wider economy.
