ECB can choose where to reinvest PEPP proceeds, with eye on Greece

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FRANKFURT, Dec 16 (Reuters) - The European Central Bank said on Thursday it could choose, if faced by stress, where and when to invest proceeds of the 1.6 trillion euros worth of bonds it has bought under its emergency asset purchase scheme.

The ECB said it would stop adding to the Pandemic Emergency Purchase Programme after March but would continue reinvesting principal amounts until 2024.

In addition, the ECB said that "under stress" it could reinvest cash "flexibly across time, asset classes and jurisdictions at any time", crucially including Greek bonds, which are excluded from the ECB's older and continuing Asset Purchase Programme.

But it could also help put out potential fires in countries such as Italy, which often faces volatility on the bond market due to its high debt burden and meagre economic growth.

The ECB has bought 1.6 trillion euros worth of mostly sovereign bonds under PEPP.

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Reporting By Francesco Canepa; Editing by Catherine Evans

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