The European Central Bank laid out eligibility and other details for its anti-fragmentation program called the Transmission Protection Instrument. Eligibility criteria include that the applicant comply with the EU fiscal framework and not be subject to an excessive deficit procedure, be absent “severe macroeconomic imbalances,” and have sustainable debt as judged by European Commission, the European Stability Mechanism, the International Monetary Fund and other institutions, together with the ECB’s internal analysis. The ECB said, if activated, it would not cause a “persistent” impact on the balance sheet, and would focus on public securities with a maturity between 1 and 10 years, though private-sector securities purchases would be considered. At the press conference, ECB President Christine Lagarde said there were certain elements that were not disclosed and that there was an element of discretion left for the ECB governing council. The euro recovered some of the losses seen during the Lagarde press conference after its publication, moving to $1.0213.
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