EUROPEAN Central Bank (ECB) policymakers set the stage for a June 10 showdown over the future of their emergency bond purchases when they met in April but stopped short of discussing their next move, the account of their meeting showed Friday.

The ECB, which is already providing record support, has helped the recession-hit eurozone economy through its worst crisis to date. But a robust recovery, coupled with a jump in inflation, will be forcing policymakers to debate whether to start dialling back the ECB’s 1.85 trillion euro (US$2.38 trillion) Pandemic Emergency Purchase Program (PEPP).

Arguments are stacking up fairly evenly on both sides, suggesting a difficult decision next month.

The latest wave of COVID-19 is receding, economies are reopening and growth is already surging, indicating that the “emergency,” a key premise of the ECB’s current support measures, is coming to an end.

But the 19-country currency bloc will need another year to grow back to its pre-crisis level, borrowing costs are already getting uncomfortably high, the euro’s strength is concerning and inflation, the ECB’s primary focus, will continue to languish below its target for years to come.

“The monetary policy meeting in June would provide the next opportunity to conduct a thorough assessment of financing conditions and the inflation outlook,” the ECB said in the account of the April 22 meeting.

Policymakers made it clear that even after PEPP, the ECB would provide plenty of support for years to come.

“Ample monetary policy support remained crucial beyond the pandemic period in order to support inflation and return it to the inflation aim,” the ECB added.

Even as they recounted risks, policymakers appeared pleased with how the market had reacted to their March decision to speed up bond purchases.(SD-Agencies)