June 30, 2020 / 2:50 PM / 7 days ago

ECB sees slow post-virus recovery, will adjust PEPP aid to situation: Schnabel

FILE PHOTO: Isabel Schnabel, member of the German advisory board of economic experts attends the 29th Frankfurt European Banking Congress (EBC) at the Old Opera house in Frankfurt, Germany November 22, 2019. REUTERS/Ralph Orlowski

LONDON (Reuters) - The European Central Bank can adjust its COVID-19 crisis measures depending on how financial markets adapt to what is likely to be a slow economic recovery from the pandemic, one of the bank’s top policymakers said on Tuesday.

Speaking in an Institute of International Finance (IIF) online conference ECB Executive Board member Isabel Schnabel said that the eurozone economy was not expected to recover to it is pre-virus size until 2022 as the earliest.

“It is very likely that the recovery will be slow,” Schnabel said, “and this will have medium to long-term consequences regarding the structure of the economy”.

Schnabel added that the bank’s Pandemic Emergency Purchase Programme (PEPP) could be halted sooner than planned if the situation improved enough, but also expanded if conditions worsened again.

“At the moment we feel very comfortable with the envelope we have,” she said. “If the outlook is very much improved, we are going to react to that.”

Reporting by Marc Jones, Editing by Iain Withers

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