It was reported on Friday (May 22) that the European Central Bank of Europe announced the minutes of the April meeting, recognizing the role of the Emergency Anti-Epidemic Debt Purchase Program (PEPP) to limit the acceleration of the economic downturn, emphasizing the importance of flexibility in emergency debt purchase.

The minutes show that the management committee must be prepared to adjust PEPP and other tools at any time. The European Central Bank emphasizes that the flexibility of emergency debt purchases is essential.

The minutes pointed out that committee members are concerned that the economic situation may become outdated. The “neutral” economic expectations scenario may be too optimistic.

The market generally believes that the monetary policy measures of the Management Committee provide a strong monetary easing policy.

The European Central Bank warned that monetary policy alone cannot solve these problems, and fiscal policy also needs to play an important role.

The longer the crisis lasts, the more the risk of financial magnification will increase. In addition to the direct damage caused by the epidemic, growth in the euro area is expected to resume.

However, when the ECB announced the minutes, it also revealed that a rapid V-shaped recovery is unlikely.

At the same time, Lian En, the chief economist of the European Bank, pointed out that inflation in the euro area will slow significantly and will bottom out in June. The tail risk has greatly deteriorated.

If necessary, the European Central Bank must be ready to adjust the tool in June. The European Central Bank must continuously review all policy measures.

Eurozone macro:

In a report on Thursday, Reuters pointed out that the EU recovery fund plan proposed this week may beautify the international status of the euro if this plan does lead to solidarity among member countries.

However, economists said that even if the proposal was passed at the meeting in late May, the debate about whether it is budgetary spending or the issuance of epidemic bonds to help poor member countries may ignite people’s concerns about the possible disintegration of the euro.

Joachim Fels, global economic adviser to Pimco, the world ’s largest bond company, said, “This crisis shows once again that the euro may not last forever. The dollar ’s global status appears more kingly.