Richard Bruton (Dublin Bay North, Fine Gael)
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120. To ask the Minister for Finance the level of activity by the European Central Bank in the Irish bond market over the past 12 months; and if he will make a statement on the matter. [1504/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware, the Eurosystem (that is, the national central banks of the euro area plus the ECB) conducts purchases of public sector securities under the public sector purchase programme (PSPP) and as part of the pandemic emergency purchase programme (PEPP).

The PSPP forms part of the ECB’s Asset Purchase Programme (APP), which is part of a package of non-standard monetary policy measures initiated to support the monetary policy transmission mechanism and provide the amount of policy accommodation needed to ensure price stability.

On 12 September 2019, the ECB Governing Council decided that net purchases would restart under the APP at a monthly pace of €20 billion from 1 November 2019. The Governing Council expects net asset purchases to run as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates. On 12 March 2020, the ECB Governing Council decided to add “a temporary envelope of additional net asset purchases of €120 billion” under the APP until the end 2020. The Governing Council also intends to continue reinvesting the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation. On 11 March 2021, the Governing Council took a decision, along with other changes, that purchases under the PEPP over the next quarter would be conducted at a significantly higher pace than during the first months of this year.

PEPP is a non-standard monetary policy measure initiated in March 2020 to counter the serious risks to the monetary policy transmission mechanism and the outlook for the euro area posed by the coronavirus (COVID-19) outbreak. PEPP is a temporary asset purchase programme of private and public sector securities.

The Governing Council decided to increase the initial €750 billion envelope for the PEPP by €600 billion on 4 June 2020 and by €500 billion on 10 December 2020, for a new total envelope of €1,850 billion with net purchases to run until at least March 2022. The Governing Council will continue to reinvest the principal payments from maturing securities purchased under the PEPP until at least the end of 2023.

For both programmes, the benchmark allocation across jurisdictions is the Eurosystem capital key of the national central banks.

Under the PSPP, cumulative net purchases of Irish government bonds amounted to € 4,342 million over the last twelve months (period covering March 2020 to end-February 2021). Purchases under the PEPP began in March 2020 and cumulative net purchases of Irish government bonds amounted to € 12,123 million as at end-January 2021.