German Finance Minister Olaf Scholz and European Central Bank President Christine Lagarde in Brussels, February 2020
Francois Lenoir / File Photo / Reuters

On March 18, the European Central Bank announced that it will buy an additional 750 billion euros’ worth of European corporate and government bonds this year. That means the ECB will spend a total of 1.1 trillion euros on eurozone bonds over the next nine months, the most it has ever spent on assets in so short a period of time. These extraordinary measures, intended to offset the adverse economic impacts of the coronavirus outbreak, amount to a monetary bazooka that will increase the European money supply (the ECB prints euros to buy bonds) and channel funds indirectly to the governments that issued the bonds, enabling those governments to bail out ailing businesses and provide for unemployed workers.

In an additional show of force, the ECB relaxed self-imposed restrictions on its purchases of government bonds for the duration of the crisis. Previously, the ECB had promised to buy no more than one-third of

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  • ERIK JONES is Professor of European Studies and International Political Economy at the Johns Hopkins School of Advanced International Studies.
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