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Hot on the heels of the Franco-German €500 billion proposed funding, Commission President von der Leyen launched the Commission’s complete recovery package – totalling €2.4 trillion. Fondation Robert Schuman describes the complete package below, and EURACTIV provides an excellent over-view of the state-by-state reactions. However, the ECB’s Financial Stability Review reminded us of the gravity of the financial situation – especially when one reads the small print. But ECB President Lagarde upstaged the FSR the saying the GDP decline was more likely to be in the 8-12% range rather than the Review’s assumption of 8%. As that is getting for three times the magnitude of the GDP decline in the Great Financial Crash a decade ago, perhaps we should be bracing for Non-Performing Loans to exceed by a margin the near €1 trillion pile of NPLs reached by 2014.

Graham Bishop

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Articles 22 May 2020 - 28 May 2020 

General Financial Policy

 

 

President von der Leyen at the European Parliament Plenary on the EU Recovery package : This is why the Commission is today proposing a new recovery instrument, called Next Generation EU – EUR 750 billion...sits on top of a revamped long-term EU budget of EUR 1.1 trillion.It goes alongside the three safety nets of EUR 540 billion in loans...,our recovery effort totals EUR 2.4 trillion.

EU future at stake: MEPs broadly welcome Commission’s recovery package proposals : Focussing on future generations, Commission President von der Leyen discussed the €750 billion recovery instrument within a revamped long-term EU budget in plenary.

Fondation Robert Schuman: The European Commission’s Recovery Plan Key points for a full picture : Commission President Ursula von der Leyen presented a €750 billion recovery plan. This massive plan, based on unprecedented debt pooling and financial transfers, which has yet to be approved by the Member States, is an important step in the history of European integration. (The full plan is below)

EURACTIV: How EU member states reacted to the Commission’s Recovery Fund proposal : The proposal’s advocates are now pushing for a quick approval; however, a compromise is not expected before July, when Germany takes over the rotating EU Presidency. The EURACTIV network gives regional and state-by-state reactions.

ECB: Pandemic increases risks to financial stability : Pandemic greatly amplified existing vulnerabilities of the financial sector, corporates and sovereigns; Policy responses to pandemic essential to preserve financial stability; Euro area banks, although now better capitalised, likely to face significant losses and further pressure on profitability.