OUR European Central Bank it did not use the flexibility of the PEPP reinvestment program to support the countries of the South during the August-September period, which it clearly did in the previous two months, reducing its positions in Greece, Italy and Spain. This indicates that he did not consider it necessary to intervene and support the region’s borrowing costs and, more generally, intends to act measuredly and cautiously.

This time around, the ECB did not intervene or reinvest in the bonds of Greece, Italy and Spain, but it did buy bonds from France, Ireland, Portugal and the Netherlands, among others, according to data released on Wednesday. Redemptions or redemptions of bonds amounted to 6.98 billion euros in the last two months, while reinvestment amounted to only 2.66 billion euros.

In particular, the central bank bought French bonds for 1.97 billion euros, Irish for 324 million euros, Portuguese for 177 million euros, Dutch for 128 million euros and small amounts in Cyprus, Luxembourg, Slovenia and Malta.

On the contrary, net purchases were negative; maturing bonds were redeemed in Germany (-3.06 billion euros), Italy (-1.243 billion euros), Finland (-1.073 billion euros), Greece (-888 million euros). ), Austria (-304 million euros), Spain (-200 million euros), Belgium (-185 million euros) and Lithuania (-27 million euros).

As a result, its positions in Greek bonds decreased by 888 million euros to 38.877 billion euros in total.

Between June and July and ahead of the ECB’s first rate hike, spreads and bond yields in the region came under significant pressure, which in fact came quickly, so the use of this flexibility was deemed necessary to dampen any possibility of market fragmentation.

This time it was not considered necessary to use this “weapon” as the pressure on bond yields is an international “phenomenon”, due to the general tightening of the monetary policy cycle, this is not a “problem” of the Eurozone, spreads have generally stabilized, and in in any case, there was no violent and disorderly disturbance in the market.

According to analysts, central banks use their tools when necessary. They are not used to trigger a market rally, but only to prevent sharp selloffs. Competent sources pass to “K” that the ECB preferred to keep its “ammunition” until it is really needed, as it has not been assessed that there is or is a risk of fragmentation, and yields and spreads are assessed as “acceptable” levels in the current growth environment. interest rates.

It is noted that in June-July, the ECB bought back 17.3 billion euros of bonds of Spain, Italy, Greece and Portugal with maturities of 18.9 billion euros of bonds of Germany, the Netherlands and France, while the countries of the South will be the main beneficiaries of the flexible reinvestment program PEPP and the ECB for the effective transfer of funds from the North to the region. However, flexible reinvestments only affected July, as they were activated on July 1, while in June only “simple” investments were active.