June 11, 2020 / 7:27 AM / a month ago

APAPR wants Romanian eurobonds included in ECB's PEPP

BUCHAREST, June 11 (Reuters) - Romania’s private pension association

* Says asks European Central Bank to include purchase of Romania’s sovereign bonds in its Pandemic Emergency Purchase Programme (PEPP) designed for the euro zone.

* Says that although Romania is not yet a member of the euro zone “our country deserves to qualify for this programme, along with Bulgaria and Croatia, states which have already joined the ERM2 mechanism.”

* An extension of the PEPP to the purchase of non-euro zone sovereign bonds would not only have positive stabilising effects in non-euro zone member states in general, but also on the investments of pension funds, which in those countries invest remarkable part of their assets in sovereign bonds.

* If the letter sent to the European Commission and the ECB is successful, Romanian eurobonds will be eligible to be bought by the ECB, the effect being “an injection of billions of euros into the Romanian economy,” and will also have a positive impact on the value of private pension fund assets.

* The European Union member overhauled its communist-era pension system in 2008, making it compulsory for working Romanians under 35 to contribute to a “second pillar” of private pension schemes as well as their state pension.

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