After protracted negotiations, EU leaders have come to an agreement for a €500 billion emergency loan finance package to help fight the economic disruption of coronavirus. The idea of common ‘coronabonds’ has, for the moment, been shelved following opposition from some northern European member states. This programme instead makes use of the EU’s bailout fund and €200 billion in guarantees from the European Investment Bank.
Meanwhile, some countries have begun a tentative easing of lockdown, with some workers returning in Spain and some shops, DIY and garden centres reopening in Austria. In Denmark, schools for the younger cohorts are also reopening.
This week is relatively quiet for data. Spanish inflation has shown a contraction this morning, with French and Italian inflation also dropping slightly, although yearly figures are still in the positive. The next European releases we see will be industrial production tomorrow, expected to decline further given the circumstances.
