In a letter to a European Parliament member, ECB President Christine Lagarde pointed out that the term “helicopter money” has been associated with a wide range of policy proposals. “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”
In another letter, she emphasized that the Treaty on the Functioning of the European Union, “prohibits” the ECB and national central banks to purchase debts directly from EU institutions and member governments. 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”.
Her comments reinforced the view that ECB would continue hoover up assets on the secondary markets even if the asset purchase program approaches limits.
