Economy & Business ISSN 1314-7242, Volume 15, 2021 Journal of International Scientific Publications www.scientific-publications.net Page 1 EXTRAORDINARY ACTIONS OF THE ECB IN RESPONSE TO THE CORONAVIRUS PANDEMIC Silvia T. Trifonova University of National and World Economy (UNWE), Faculty of Finance and Accounting, Sofia 1700, Studentski Grad “Hr. Botev”, Blvd. “8 December”, Bulgaria “Extraordinary times require extraordinary action. There are no limits to our commitment to the euro.” Christine Lagarde, President of the ECB 1 Abstract The main objective of the paper is to analyze the extraordinary actions implemented by the European Central Bank (ECB) in response to the coronavirus pandemic in 2020-2021. These actions are mainly aimed at helping the eurozone economy absorb the shock of the pandemic, maintaining easier lending conditions, facilitating access to credit for individuals and businesses, and increasing banks’ capacity to lend. The paper is focused on the new unconventional monetary policy programme of the ECB implemented during the coronavirus pandemic – the Pandemic Emergency Purchase Programme (PEPP), as well as on the enhanced Targeted Longer-term Refinancing Operations (TLTROs), the introduced new non-targeted Pandemic Emergency Longer-term Refinancing Operations (PELTROs), the implemented comprehensive set of collateral easing measures, the increased banks’ lending capacity and the extended swap and repo lines. The research methodology includes theoretical and methodological analysis, comparative study, inductive and deductive approach, descriptive study, systematic approach, empirical analysis and critical analysis. The paper concludes with summarizing the results from the study. Keywords: European Central Bank, Extraordinary actions, Unconventional monetary policy measures, Coronavirus pandemic 1. INTRODUCTION The main objective of the paper is to analyze the extraordinary actions implemented by the European Central Bank (ECB) in response to the coronavirus pandemic in 2020-2021. These measures and actions are aimed at helping the eurozone economy absorb the shock of the pandemic, maintaining easier lending conditions, facilitating access to credit for individuals and businesses, and increasing banks’ capacity to lend. The ECB considers the COVID-19 pandemic to be a shock of unprecedented intensity and severity, with the outbreak and escalation of the pandemic putting Europe in a health emergency (Schnabel, 2020b). As Lagarde (2020b) argues, the deliberate shutdown of the economy triggered by the coronavirus pandemic has produced a highly unusual recession. COVID-19 has produced an extreme economic shock that required an ambitious, coordinated and urgent reaction on all policy fronts to support businesses and workers at risk (Decision (EU) 2020/440 of the ECB). Therefore, in this paper we are interested in how the ECB contributes to overcoming the negative effects of the pandemic through its unconventional monetary policy instruments and extraordinary actions. The subject of research in the paper is the ECB, and the object of research – the extraordinary actions and measures implemented by the ECB in response to the coronavirus crisis. The remainder of the paper is organised as follows. The second section represents a brief literature review on the ECB’s unconventional monetary policy measures and actions. In the third section the databases and methodology used in the study are explained. In the fourth section the results from the 1 Lagarde, C 2020a, “Our response to the coronavirus pandemic”, The ECB Blog, Frankfurt am Main.