web_christine_lagarde_shutterstock_1127436857.png

ECB president Christine Lagarde

The money will be used to buy government and private sector debt, and will be used until the end of 2020.

Rules blocking the purchase of Greek government debt have been lifted, so this package - named the Pandemic Emergency Purchase Programme - can benefit all economies that use the single currency.

“Extraordinary times require extraordinary action,” tweeted ECB president Christine Lagarde.

“There are no limits to our commitment to the euro. We are determined to use the full potential of our tools, within our mandate.”

The ECB’s governing council promised to look out for “all sectors of the economy”, and said the PEPP could be made larger in the future.

“The governing council is fully prepared to increase the size of its asset purchase programmes and adjust their composition, by as much as necessary and for as long as needed,”said the bank

“It will explore all options and all contingencies to support the economy through this shock.”

The ECB’s move follows the US Federal Reserve’s decision on Sunday to cut interest rates close to zero and announce a stimulus programme of $700bn.

Several major central banks from around the world, including the Fed and the ECB as well as others such as the Bank of Japan and the Bank of England, took coordinated action to make sure the US dollar remained available for them to hand out to commercial banks and keep markets stable.

Some economists believe the coronavirus pandemic has already dragged the world economy into a recession, but they also believe such coordinated action - alongside fiscal stimulus from governments - will ensure global growth returns to positive by the end of the year.