LONDON/BENGALURU- The European Union's 750 billion euro recovery fund plan is not a game changer as the level of debt alleviation for the likes of Italy are likely to be marginal, a PIMCO lead sovereign credit research analyst said on Thursday.

"It was a step in the right direction, which could allow peripherals to inject more stimulus into their economies from 2021," Nicola Mai, a member of PIMCO's European portfolio committee, told the Reuters Global Markets Forum, referring to the EU plan released on Wednesday. 

"Not a game changer though as debt level alleviation will be marginal. And uncertainty about political ratification remains significant."

PIMCO, one of the world's largest investment firms, is positioned cautiously on euro zone peripheral bonds, seeing decent value at current levels, said Mai, who added that she was watching to see if or how much the EU's recovery plan is watered down.

Analysts expect there is a chance that the proposal, which will offer a mix of grants and loans to coronavirus-hit economies, may be watered down given opposition from hawkish Northern European states, who prefer providing loans, not grants.

Mai added that the European Central Bank's role as lender of last resort for sovereigns remains key and expects the bank to expand its bond purchases next week, possibly by around 500 billion euros.

He also expects the ECB to add recently downgraded investment grade bonds, known as "fallen angels" to its asset purchases as early as next week.

He expects the Bank of England to remain on hold for a very long time, while the Swiss National Bank's space to cut rates further into negative territory is limited by financial sector considerations, he said.

((This interview was conducted in the Reuters Global Markets Forum, a chat room hosted on the Refinitiv Messenger platform. Sign up 

(Reporting by Yoruk Bahceli in London and Aaron Saldanha and Lisa Mattackal in Bengaluru; Editing by Dhara Ranasinghe) ((Yoruk.Bahceli@thomsonreuters.com; +44 20 7542 7571; Reuters Messaging: yoruk.bahceli@thomsonreuters.com))