Pandemic Emergency Purchase Programme (PEPP)

The pandemic emergency purchase programme (PEPP) is a temporary asset purchase programme of private and public sector securities, as purchased under the existing asset purchase programme (APP). In addition to the net purchases under the APP, non-financial commercial paper with a minimum remaining maturity of at least 28 days (APP: six months) is eligible for purchase under the PEPP as well as public sector securities with a minimum remaining maturity of 70 days (APP: one year). 

An envelope of €750 billion was originally envisaged. On 4 June 2020, the ECB Governing Council decided to increase the envelope by €600 billion; it was increased again by €500 billion on 10 December 2020 to a total of €1,850 billion. PEPP purchases are made in addition to purchases under the APP, which was increased by €120 billion until the end of 2020 on 12 March 2020 and will continue at a monthly pace of €20 billion.

PEPP purchases started on 26 March 2020. They are made to the extent to which these are necessary and proportionate to ensure the Eurosystem’s ability to fulfil its mandate is not impaired by the exceptional economic and market conditions. For the purchases of public sector securities, the benchmark allocation across jurisdictions is the capital key of the national central banks. At the same time, purchases under the PEPP are conducted in a flexible manner. This allows for fluctuations in the distribution of purchase flows over time, across asset classes and among jurisdictions. Combined with other measures, the PEPP aims to preserve favourable financing conditions during the pandemic. The envelope of €1,850 billion represents a maximum that need not be used in full. The temporary measure is envisaged to last until the ECB Governing Council judges that the COVID-19 crisis phase is over, but at least until the end of March 2022. The maturing principal payments from securities purchased under the PEPP will be reinvested until at least the end of 2023.

As with the APP, the bulk of PEPP purchases are made by the Eurosystem national central banks; a small proportion is made by the ECB itself. The same risk-sharing principles apply for the PEPP as for the APP.