, Columnist
The 'No Limits' Solution to Europe's Virus Hit
The ECB must abandon the constraints on how many bonds it can buy from each of its members. Europe needs unconstrained QE to save the euro.
A hopeful case.
Photographer: YANN SCHREIBER/AFPThis article is for subscribers only.
Covid-19 is make or break for the euro.
The only way the European Central Bank can convince markets that it will do whatever it takes to save the single currency in the current crisis is to abandon the self-imposed political constraints on the assets it can buy under its Quantitative Easing program. These encompass the so-called “issue limits,” which dictate that the ECB cannot buy more than one-third of a country’s eligible debt, and the “capital key,” which insists that the central bank’s bond purchases are in proportion to the share of capital held by each country in the ECB.