Coronavirus Pushing EU Towards Federalization - Forex News by FX Leaders

Coronavirus Pushing EU Towards Federalization

Posted Tuesday, September 8, 2020 by
Skerdian Meta • 1 min read

The aim of the EU has been a federal Europe from the beginning. The union has gotten closer until 2016, when Brexit happened. The plans for a stronger union were put on hold, with Brexit and now the coronavius, but the EU is using the coronavirus opportunity to start the fiscal union.

This should be positive for the Euro in the long run. EUR/UD climbed around 35 pips after that. But, with the native movement increasing in Italy, France, Spain, Germany and everywhere, so we will see how the EU will progress, because the next few years will be determinant for the fate of the EU and the Euro.

Comments from the German finance minister on Bloomberg

  • Germany needs to take on significant debt in 2021
  • We are seeing some good data on the economy
  • Germany will need to suspend debt rules in 2021 again
  • German budget will be in line with debt rules in 2022
  • Recovery measures are the start of a fiscal union
Imagine starting a fiscal union without asking voters if they want one.
Scholz was out with similar comments in an interview earlier today on adding debt.
“A source familiar with the matter told Reuters last week that Scholz is working on a budget for next year that would see Berlin take on net new debt of at least 80 billion euros to fund more measures in the fight against the coronavirus.”
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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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