“European Central” buys bonds worth 135 billion euros in two months.. yields are on the rise


Yesterday’s data showed that the European Central Bank bought more government bonds in April and May than the four largest eurozone countries sold in that period, but is still aggressively trying to contain an increase in yields.
According to “Reuters”, the European Central Bank boosted its bond purchases in mid-March to reduce borrowing costs and help eurozone governments to move forward with massive spending plans aimed at supporting the economy during the Corona virus pandemic. The bank will update its position the day after tomorrow.
The central bank has bought 135 billion euros of sovereign debt from Germany, France, Italy and Spain in the past two months, or five times the net paper supply of those countries, according to Unicredit estimates.
However, government bond yields continued to rise in the four countries, and the rally only stopped when European Central Bank President Christine Lagarde indicated late last month that the central bank was not ready to withdraw its support.
The market took this as a sign that the European Central, during its meeting on the tenth of June, will decide to maintain its emergency purchase program for the Corona virus pandemic, worth 80 billion euros per month.
In addition, the European Union countries approved yesterday the establishment of a fund to finance plans to stop using fossil fuels, paving the way for member states to start getting money from it.
The 17.5 billion-euro ($21.27 billion) “Just Transition” fund raises funds from the EU budget and the COVID-19 recovery fund.
The fund aims to support the communities most affected by plans to phase out coal and other fossil fuels and emissions-intensive sectors. The fund will support projects, including managing coal mine closures, retraining workers for other jobs, replacing coal-heavy industries with greener industries, and creating jobs, all of which are key to putting the European Union on track to achieve the goal of zero emissions by 2050. that lead to global warming.
Yesterday, the European Union countries adopted the regulations for the “fair transition” fund, and that was the last obstacle before it entered into force after the European Parliament approved it last month.


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