The European Central Bank has defended its huge pandemic stimulus package and said it expected to have to use the full amount of planned debt purchases to help the euro zone stay afloat during a lockdown-induced recession.

Tackling the biggest economic collapse in living memory, the ECB is buying massive amounts of debt and paying banks to lend out its cash in an effort to salvage the bloc's economy until Europe is ready to reopen after the Covid-19 lockdowns.

However, many of its decisions were made in haste and guided by acute market stress, like the blowout in Italian borrowing costs this spring, leading critics to argue for a pause to examine the effectiveness and any unintended side effects of policy.

ECB President Christine Lagarde told a news conference that results so far showed its package was working and that further "ample stimulus" was needed to counter high uncertainty around efforts to combat the virus and mitigate the economic impact.

"Unless there are significant upside surprises, our base line is that we will need the entire envelope of PEPP," she said of the 1.35 trillion euros worth of planned debt purchases in its so-called Pandemic Emergency Purchase Programme.

"It's effective, adequate and it's working," she said.

Earlier, the ECB Governing Council kept policy on hold after a recent string of more positive economic data that followed a double-digit fall in output in the three months to June.