The euro is weak against the pound and the dollar this morning, as the markets begin to vent their frustration at the Eurozone’s inability to adopt a united approach to fighting the economic damage caused by the coronavirus pandemic.
Member states are currently in disagreement over ‘coronabonds’, which would be bonds issued by all Eurozone states to secure fresh funding to fight the economic consequences of the Europe-wide lockdown, aimed at stemming the spread of the coronavirus.
The proposal for ‘coronabonds’ to help the countries hardest-hit by COVID-19 has run into opposition by what have been termed the ‘frugal four’, occupying a position traditionally held by the UK before Brexit. The Netherlands, Germany, Austria and Finland argue that the bonds would encourage countries who had planned for financial emergencies to continue in the same way in the future. Mark Rutte told the media that there would not be ‘any circumstances in which the Netherlands will accept Eurobonds.’ However, other European nations have so far signalled their support to join the proposal, including Latvia, Lithuania, Estonia, Cyprus and Slovakia.
It was a mixed day for euro yesterday; although Eurozone-wide marketing figures showed a slightly bigger drop than expected, there were some areas of positivity, with both French and Spanish manufacturing performing better than expected.
More positivity was delivered by unemployment figures, surprisingly falling to their lowest level since 1995. Many put it down to the rigid labour controls in the eurozone, compared to the US, for instance, but it remains to be seen if this can persist throughout the crisis.
