Yesterday the President of the European Central Bank, Christine Lagarde, warned that the economic uncertainty within the EU is still dangerously high, with both companies and consumers’ reluctance to spend being a particular worry. During her debate with deputies from the European Parliament she stated: ‘The repercussions of the pandemic are still being felt, and the economic outlook appears to be uncertain’, adding that, ‘The health crisis will continue to cast a shadow over economic activity and represent potential risks to the economic outlook’. She confirmed the ECB’s willingness to launch more stimulus packages to help EU economies recover in light of the ongoing uncertain prospects of any economic improvement as a result of the pandemic.
However, Lagarde has had to defend the proposed EUR750bn recovery fund, arguing that the ECB is not pushing the EU to make the fund permanent, stating that it would be ‘a one-off response to exceptional circumstances’. The defence of the fund came after news reports indicated that the ECB called on Brussels to make any rescue package permanent.
Also in the news are the ongoing Brexit negotiations, and the pendulum seems to be swinging towards some sort of deal. The EU’s chief negotiator Michel Barnier is reported to be ‘determined to reach a deal’. His mood was matched on this side of the channel, with upbeat headlines from the UK’s chief negotiator David Frost. The mood, added to the lack of sabre rattling over the last few days, has led many to have a sneaky suspicion that movement is happening.