The European Central Bank (ECB) said it would not apply the maximum holding threshold of 33% of the sovereign debt of a single country in the PEPP operation of massive repurchase of public and private bonds, according to a decision published on the night of Wednesday 25 to Thursday 26 March.
By lifting this self-imposed limit, the ECB is exposing itself to a new legal dispute over the PEPP operation. Critics of this type of operation, particularly in Germany, have accused the monetary institute in the past of disguised financing of euro area countries, a practice prohibited by the European treaties.
The Court of Justice of the European Union had validated the previous OMT operation, drawn up in 2012 during the sovereign debt crisis, but never used it, invoking in particular the limit of 33% holding of the debt of a single euro area country (see EUROPE 11336/18).
In presenting the €750 billion PEPP operation (see EUROPE 12450/6), the ECB had indicated that it reserved the right to examine the need to respect the 33% threshold.
It should also be noted that the minimum maturity of a bond has been lowered to 70 days.
The monetary institute can only acquire sovereign bonds on secondary markets. (Original version in French by Mathieu Bion)