To qualify for interventions, countries must have negotiated with the other euro area governments a precautionary European Stability Mechanism (ESM) programme with strict and effective conditionality. Conditionality serves to ensure that governments continue to correct existing economic and fiscal weaknesses when OMTs are activated. At the same time, OMT purchases will not take place while a country programme is under review.
[20] For a more detailed discussion of the channels of transmission of the APP and its impact on the euro area yield curve, see Lane, P. R. (2019), “The yield curve and monetary policy”, public lecture for the Centre for Finance and the Department of Economics at University College London, London, 25 November. [21] See Bernanke, B., op. cit.