In yet another crucially important videoconference, the finance ministers of the European Union finally reached an agreement for a 540 billion-euro rescue package, aimed at mitigating the economic fallout in Europe from the coronavirus pandemic.
Striking such an accord was important not only for economic reasons but also for political purposes. The cohesion of the EU during the crisis has been questioned by some critics who have also suspected the frugality of the union.
That is why particular emphasis was made on the 'spirit of solidarity' between the member states, and the videoconference was reportedly ended with cheerful applause from everybody.
#Eurogroup agreed on a solid package of instruments to respond to #COVID19 crisis in a spirit of solidarity.
— Charles Michel (@eucopresident) April 9, 2020
European safety net of half a trillion € to support workers, SME’s and businesses.
Now preparing the ground for a strong recovery in order to relaunch our economies.
Reportedly, the measures would include a joint insurance fund for employees worth 100 billion euros, 200 billion euros would be allocated to firms in the private sector through the mechanism of the European Investment Bank, and 240 billion euros worth of credit lines would be appropriated from the Euro Area’s bailout fund.
The publication, however, made no mention of the highly disputed Eurobonds, which continue to be a significant point of contention between the prosperous northern states and the poorer southern countries.
As a result of that, it remains unclear as to whether the European states would agree to issue commonly shared debt, or the current bailout mechanism would suffice for the time being in mitigating the risks from a major recession.
Meanwhile, the EURUSD continues trading in an ascending channel. The pair is nearing the 38.2 per cent Fibonacci retracement level at 1.09644, which serves as a major resistance level.
The consolidation just below that level could either lead to a new breakout, or it could conclude with a new reversal in the direction of the underlying price action.
EURUSD 1H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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