Marcello Messori says that the cancellation of an EU member state’s public debt held by the ECB is a remote possibility. “Already today there is the possibility that central banks can keep public debt in their balance sheets for a long time, with the possibility of re-investing in the same debt when the bonds mature. When the bonds of a State underwritten by the ECB reach maturity, the Central Bank gets the coupon paid, but then buys back bonds of the same State, re-investing. In this way, the amount of debt at the Central Bank remains constant, it even increases as the purchase programs continue.”
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