EU agrees on another aid package

On Thursday, the 27 members of the European Union agreed to 1 trillion-euro fund to ease recovery from the pandemic.

After a four-hour video conference, the conclusion was an immediate help for those countries whose economies have been devastated by the pandemic. The package is said to be operational by June 1, and it represents EU's long-term budget for 2021-2027.

It is not the first-aid package approved by the EZ. The Eurozone reached a consensus earlier this month: 3.3 trillion Euros for health services, small businesses, and financial aid for people who can't work.

Officials believe the just one trillion won’t suffice, and the package can go as high as 1.5 trillion Euros. David Sassoli, the President of the European Parliament, stated that Europe faces the most significant recession of the century.

During the summit, differences between the governments deepened as they didn't reach common ground regarding the nature of the fund: will it grant money or just merely loans? President Macron believes that if it is a loan, more damage will be in store for the countries that are already in debt, such as Italy, Greece, and Belgium.

In the light of the latest events, Christine Lagarde, Governor of the European Central Bank, considers that the Eurozone economic output will be of 5%, with a high of 15%. Also, an economic contraction of 5.4% is in sight – the most significant one since 1999.

As history repeats itself, once again, Germany and the Netherlands opposed the EU's idea to cover the 75-billion-euro money-gap created due to Brexit.

Thorough proposals regarding the best approach are due May 6.

Awaiting a final answer, EUR/USD fell below 1.08 during yesterday’s trading session. Economists believe the pair can reach a low of 1.06. In early trading, Europe50 fell 1.2%, while UK100 lost 1.5%.


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Sources: cnbc.com, france24.com, euronews.com

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The information presented herein is prepared by CAPEX.com and does not intend to constitute Investment Advice. The information herein is provided as a general marketing communication for information purposes only and as such it has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience or current financial situation.

Therefore, Key Way Investments Ltd shall not accept any responsibility for any losses of traders due to the use and the content of the information presented herein. Past performance is not a reliable indicator of future results.