European Commission President Ursula von der Leyen. Image source: Photo by European Parliament is licensed under CC BY 4.0
Global media outlets revealed earlier today that the European Commission of the EU is about to fire another bazooka of fiscal stimulus with the intention of helping the struggling economies in Southern Europe.
Reportedly, the bloc is ready to extend more than 700 billion euros to Spain, Italy, and Greece, which were already wrestling with debt crises even before the outset of the coronavirus pandemic.
The news comes just days after the announcement that Emmanuel Macron's government in France is going to work with Angela Merkel's government in Germany towards resolving the economic woes of the bloc by means of issuing joint debt.
Today's developments are therefore a manifestation of these plans for recovery since the funding for this latest fiscal relief package is going to be provided precisely by issuing joint European debt.
This would not only breach the political gap between Europe's wealthier north and its poorer south, but it's also going to represent the next crucial step towards EU's financial integration.
In the wake of the coronavirus crisis, we argued that member-states of the EU have the capacity to face together the economic challenges stemming from the pandemic, and that doing so alone would have been disastrous.
Today's reports, if proven genuine, would substantiate these arguments, because undertaking such a massive debt-financing project is illustrative of long term commitment.
Far from solely being an economic burden for the richer North, the issuing of joint debt could also cement the political cohesion between the member states of the bloc.
It is because of such optimism that the EU might emerge stronger from the coronavirus crisis, the euro surged by more than 0.60 per cent against the dollar in less than an hour following the publication of the news.
The EURUSD is currently attempting to establish a successful breakout above the major resistance level at 1.09980 after several failed attempts. If it succeeds in doing so, this could lead to the development of a new major bullish trend.
The price action of the EURUSD has been consolidating within the boundaries of a narrow range with the aforementioned resistance level serving as its upper boundary, and the major support level at 1.08000 serving as the range's lower boundary.
This range-trading environment first emerged in early April, but now a decisive breakout can finally emerge as the underlying bullish momentum continues to appreciate.
EURUSD 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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