ECB Governing Council member said Peter Kazimir said “concerns about the cliff effect (of ending PEPP) cannot automatically mean demands for increasing the standard programs (APP)”. “There is no automatic formula,” he said. “We’ll be deciding according to conditions at the given time.”
He also said, the PEPP has been “functioning very well and naturally it is now in the final stage of its life cycle.” “It’s a special tool designed for a special situation, and it will be phased out when it’s not needed anymore,” he added. “The market seems to understand that this tool will be terminated with the end of the pandemic.”
“If inflation remains elevated next year because of supply bottlenecks, my concern is that it could spill into wage negotiations for the following year as well,” he said. But “we are not seeing this happening in key countries so far.”
