The European Commission plans to issue €50 billion in long-term bonds between January and June 2022, to be complemented by a dozen auctions of short-term bills, to cover the financing needs for the first half of next year under the ‘NextGenerationEU’ recovery fund. So far, Brussels has already raised 71 billion euros to finance the recovery programme.
Link Securities | We highlight the negative impact that the new conflict between the European Commission (EC) and the populist government of Italy is having on the European securities markets and on the euro. Rome has not taken the necessary measures to contain the public deficit, which it will lead to a further increase in Italian public debt, whose weight could surpass 135% of GDP in two years.
Last week the Italian Government approved a public deficit targets of – 2.4% of GDP for 2019-21 which will be included in the draft budget for 2019. The Minister of Finance, Giovanni Tria, has been under considerable pressure from the Lega and Five Stars, and has had to accommodate their electoral promises in the budget. One of the most important consequences of developing these budget will be a ferocious debate with the EU.
The European Commission determined on Wednesday that the draft of Spain’s budget for 2018 sent by the Spanish government “complies in general terms” with the criteria established in the Stability and Growth Pact. Despite the fact the public deficit will exceed the target agreed on for next year.
After 2015′ s Greece referendum, Tsipras got an attack of the jitters, a possible coup d’etat was insinuated, so he decided to turn the sense of the referendum around, giving in unconditionally to the demands of the Brussels bureaucrats. If Marine Le Pen were to win the second round of Sunday’s French elections, would she give into pressure from inside and outside Europe to renounce her goal of getting rid of the euro?
It’s been over 280 days since the general elections on December 20th and Spain is still without a government. This has its consequences. On October 15th the country’s caretaker government is due to present its 2017 Budget to Brussels and provide information on the adjustments and other measures which it plans to implement to correct the public deficit. But BS Markets says this draft can only be, at most, an extension of the 2016 Budget, a document without any changes.
The EU Comission has decided not to fine Spain and Portugal for its deviation in the public deficit in 2015. Both countries, which have been traditional fiscal sinners since the crisis began, did not take effective actions last year. Although symbolic, Brussels could have imposed fines of up to 0.2 percent of GDP on Madrid and Lisbon, around 2.1 billion euros in the case of Spain.
Some drivers are so happy when they don’t have to pay their traffic fine immediately, but without realising that a few days they will receive official notification with a surcharge. Something like this has happened with Brussel’s decision to refrain from imposing an immediate fine on Spain for failing to meet its deficit commitment until June 26th. In exchange, the EC has demanded a tough adjustment amounting to 8 Bn€ over this year and next.
The Belgian authorities understand that the risk of Brussels losing its capital status in Europe is very real in the wake of the terrorist attacks and the security deficiencies these revealed. Such a mess is incompatible with being the headquarters for the European Union and NATO.