sp200519 ~ e5203d3520. en. html 8 / 14 5 / 19 / 2020 pandemic central banking : the monetary stance, market stabilisation and liquidity ( percentages per annum ) sources : refinitiv and ecb calculations. notes : daily data. the latest observations are for 14 may 2020. this tightening of financial conditions represented a further headwind for the effectiveness of monetary policy. there was an evident risk of adverse liquidity spirals and an overshooting of asset price corrections in many markets, impeding the transmission of monetary policy and endangering financial stability. in the context of a monetary union, the absence of currency risk means that flight - to - safety dynamics have an intrinsic cross - border element, which primarily takes the form of reallocations across sovereign bond markets. in view of the central role of sovereign yields as benchmarks in pricing assets and setting lending rates, non - fundamental volatility in sovereign spreads impairs the transmission of monetary policy. in this context, the pepp announcement acted as a stabilising force. the announcement of the pepp has successfully halted the tightening in financial conditions and contributed to a partial reversal in the trend. the embedded flexibility of the pepp, which allows for fluctuations in the distribution of purchase flows over time, across asset classes and among jurisdictions, has been a crucial element in fostering its effective market stabilisation function. market stabilisation has also enabled the resumption of issuance in the debt securities markets : corporate bond issuance by investment grade - rated firms picked up noticeably after the pepp announcement, as did commercial paper issuance by non - financial corporations ( nfcs ). [ 4 ] this reflects an important aspect of the pepp compared to the app : under the pepp, we have expanded the maturity range of our private sector purchases to capture the market for non - financial commercial paper, which was at risk of freezing up at the beginning of march. these developments highlight that purchases under the pepp have provided crucial support to market - based funding conditions for companies in the euro area. central bank liquidity and credit provision especially in an uncertain macro - financial environment, access to central bank liquidity on generous terms and over long tenors supports the maintenance of credit provision by the banking system. our longer - term refinancing operations include both unconditional and targeted programmes. the former provides a liquidity backstop to banks and ensures

##es. last year, the primary surplus was 4. 2 % of gdp, outperforming the target of 0. 5 %. the current account during the last two years had effectively been in balance from a 15 % deficit eight years ago. at the same time, sweeping structural reforms have been implemented, covering the pensions system, the health system, labour markets, product markets, the business environment, public administration, etc. recapitalisation and restructuring have taken place in the banking system and significant institutional reforms have been initiated aiming at reducing the volume of npls. moreover, there is evidence that the economy has been undergoing a rebalancing towards tradable, export - oriented sector : the share of exports of goods and services in gdp increased from 19 % in 2009 to 28. 2 % in 2016, with most of the increase coming from exports of goods. 2. 3 recent economic and financial developments see appendix for an update on the macroeconomy and the banking sector. 3. bog proposal - a mild debt relief exercise see appendix for details. 4. major pending issues two quotes from the latest eurogroup statement ( 15. 06. 2017 ) : i ) “ the eurogroup stands ready to implement, without prejudice to the final dsa, extensions of the weighted average maturities ( wam ) and a further deferral of efsf interest and amortization by between 0 and 15 years. as agreed in may 2016, these measures shall not lead to additional costs for other beneficiary member states ”. ii ) “ in view of the ending of the current programme in august 2018, the eurogroup commits to 2 / 4 bis central bankers'speeches provide support for greece ’ s return to the market : the eurogroup agrees that future disbursements should cater not only for the need to clear arrears, but also to further build up cash buffers to support investor's confidence and facilitate market access ”. 4. 1 getting greece into qe the person speaking before you was the first greek economist to talk about the modalities and the benefits of getting greece into ecb ’ s qe programme, in october 2015 talking to international investors in new york, and the programme – let me remind you that the qe programme started in march 2015. president draghi, when asked about the eventuality of greece ’ s participation in the ecb ’ s qe programme [ on many occasions in fact, right after many governing