(Bloomberg) -- The European Central Bank is likely to continue purchasing junk-rated Greek sovereign debt even after the pandemic crisis has passed, according to Governing Council member and Greek central bank chief Yannis Stournaras.

“This is not a question of Greece’s ability to service debt, but a question of even transmission of monetary policy,” Stournaras told Politico in an interview published Monday. He added it was his “expectation” that the ECB’s older asset-purchase program, known as APP, would take over some of the flexibility of the emergency program launched in March 2020.

A move to include Greek debt in the ECB’s post-crisis monetary policy would mark a significant step for the central bank, which excluded junk-rated bonds from its purchase programs prior to the pandemic. Its decision to allow Greek bonds as part of its emergency bond-buying program marked an acknowledgment at the time of the broad scope of the coronavirus shock.

Stournaras’s remarks also set the stage for the next debate among ECB plolicy makers. More conservative members of the Governing Council have already said they don’t see the need to transfer the emergency program’s flexibility to the older bond-buying plan. Economists expect the central bank to decide on the matter by December.

As the euro-area economic recovery solidifies, however, some elements of the ECB’s older tool “may need to be recalibrated,” Stournaras said. Officials will ensure that borrowing costs are kept low throughout the region and that “there will not be more fragmentation.” The pace of APP purchases might also need to be stepped up, he said.

He also argued that ending the pandemic program, known as PEPP, in March as scheduled isn’t a guaranteed outcome.  

“It would be really arrogant on our part to declare victory over the pandemic right now,” Stournaras said. “That’s why it is too early to draw conclusions about the extension or not of the PEPP beyond March 2022.”


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