Wimar Bolhuis: ECB intervention helped prevent euro crisis
Dutch Central Bank President Klaas Knot wants to wind down the European Central Bank’s crisis bond-buying programme this year because the economic outlook is looking increasingly positive.
On Dutch NPO Radio 1 programme Blok & Toine, Assistant Professor Wimar Bolhuis spoke about the ECB’s programme. Does Bolhuis share Klaas Knot’s optimism? 'The outlook is indeed looking very promising’, Bolhuis says. 'International organisations such as the IMF are also optimistic. If the vaccination programme is going well as we approach summer, then the recovery will be huge.'
How does the ECB’s bond-buying work exactly? 'Last year at the start of the crisis, the ECB announced its Pandemic Emergency Purchase Programme (PEPP). The ECB bought up government bonds and company assets as a way to support the economy.’ The programme has helped Europe get through the crisis, says Bolhuis. 'Without the programme, interest on the debt of southern Member States would have risen sharply. That might have caused a crisis of confidence and possibly a euro crisis. Then we really would have had a huge problem.'