Eurozone debt likely unsustainable without QE – BIS paper

Authors find benefits of ECB’s PEPP extend beyond the end of the bond-buying programme

Annabel Jeffery

Debt in some eurozone economies would likely have become unsustainable if the European Central Bank had not intervened with asset purchases after the Covid crisis, new research finds.

The Bank for International Settlements working paper calibrates a model of debt sustainability to a “representative eurozone high-debt country”. Authors Enrique Alberola-Ila, Gong Cheng, Andrea Consiglio and Stavros Zenios then explore the impact of the ECB’s pandemic emergency purchase programme (PEPP).


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