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Europe has a sticking plaster, but Italy is going to need a transfusion

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Pepp: Frankfurt HQ of the ECB

Pepp: Frankfurt HQ of the ECB

Pepp: Frankfurt HQ of the ECB

Once again, it was the European Central Bank (ECB) that stepped up to provide an interim solution to the costs being imposed on governments by the coronavirus pandemic.

Last month it brought in its Pandemic Emergency Purchase Program - known as Pepp - which has been used to mop up massive amounts of government debt and will, with other ECB programmes, absorb close on €1 trillion of bonds this year.

Effectively, the ECB is providing a sticking plaster to stop Italian state finances from bleeding out because the leaders of the eurozone cannot agree to collectively underwrite directly the cost of fighting the pandemic with a bloc-wide bond scheme that features debt owned jointly by countries from Germany to Malta.