Yesterday, EU leaders were unable to agree on both the scale and scope of the economic response to the going coronavirus pandemic, so instead went for the lowest common denominator, i.e. buying more time. The 27 EU leaders met for a fraught 6 hours (remotely of course) as they struggled to agree a unified response to the Covid-19 crisis.
Ahead of the summit nine countries, including hardest-hit Italy and Spain, had pleaded in a letter for ‘corona bonds’, pooled borrowing to cushion the economic blow of the virus.
However, this was given short shrift by northern countries, and instead kicked the can down the road and tasked its EU finance ministers with coming up with options within two weeks. However, the meeting did conclude with some agreements, including on procurement of vital medical equipment, on funding research into vaccines and new medicines, on facilitating critical supply chains and on getting EU citizens home.
Also, Fed’s Powell made a rare appearance on the Today Show yesterday in the US. He told the show the US economy ‘may be in a recession’, however, he added ‘I would point to the difference between this and a normal recession. There is nothing fundamentally wrong with our economy. Quite the contrary. We are starting from a very strong position’. He was asked his thoughts about Trump’s remarks about wanting to see the economy reopen by Easter. He noted ‘The virus is going to dictate the timetable. The sooner we get through this period, and get this virus under control, the sooner the recovery can come’.