ECB Chief Says Governing Council Never Discussed Helicopter Money

European Central Bank President Christine Lagarde said the Governing Council has never discussed the issue of helicopter money.

In a reply to Philippe Lamberts, member of the European Parliament, she reaffirmed that the ECB has not adopted a formal position on the matter.

"It should be noted that the term helicopter money has been associated with a wide range of policy proposals," Lagarde said.

"In many cases, these proposals do not fully address the associated operational, accounting and legal complexities nor provide a comprehensive cost-benefit analysis of the full economic and monetary impact," she added.

In another letter to Marco Zanni, an MEP member, Lagarde said the ECB cannot lend directly to governments.

The Treaty on the Functioning of the European Union prohibits the ECB as well as other national central banks of member states from purchasing debt instruments directly from central governments, Lagarde pointed out.

The aim of the provision is to encourage the member states to follow a sound budgetary policy, she said.

"The Treaties have been understood to mean that primary market purchase of government debt, i.e. the direct financing of governments, would undermine the capability of this objective to encourage such disciplined budgetary policy," Lagarde said.

The ECB has currently committed to provide more than EUR 1 trillion on public and private debt this year.