The European Union has come under fire over the perceived slow response in helping member nations ravaged by the coronavirus protect their economies. Financial leaders from the 27 states will be requested to consider suggestions from Spain to get a $1.5trillion (£1.3trillion) investment package to reconstruct worst-hit savings.
But with the EU27 torn over the issue of how to respond to the crisis, Brussels has been warned: “either we all sink or we all float.” Spanish Foreign Affairs Minister Arancha González Laya defended her administration’s proposals, insisting the strategy would allow the EU to maintain a place. Speaking to Euronews, Ms González Laya said: “What we want in this crisis is, either we all sink or we all float. “
However, Downing Street has remained defiant, denying there will be a U-turn in Brexit policy. Mr Johnson has ruled out delaying the date when Brexit would finally take effect following Britain’s 2016 vote to leave and said London was also ready to withdraw from its current cooperation accords by the end of the year without a new deal.
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She continued: “What we will have is a massive recovery ahead of us given the damage COVID is inducing. “But it is also a response which will give us the means that we would like to keep Europe as a strong player not only on the world market but also in world political and foreign affairs.”
In the past Eurogroup meeting held in Brussels earlier this month, eurozone members appeared to partially bridge the gap after northern states rejected suggestions of issuing debt to assist struggling nations.
The EU27 also consented to a $500billion (£439billion) rescue package as well to a $200billion (£175billion) in guarantees from the European Investment Bank. Spain’s proposal comes after the national central bank warned their GDP could endure a 13.6 per cent slump because of the company closures that the coronavirus pandemic caused.
UniCredit Group chief economist Erik Nielsen warned the prediction by the Bank of Spain could still be very optimistic compared to his. Talking to Bloomberg, Mr Nielsen said: “Our forecast for Spain this year is minus 15 per cent and roughly the same for Italy. “That is the narrative of nations in southern Europe that are very determined by the tourism industry. “Even if you open up the economy, we think it’s not likely that people will go on holiday this summer to the Mediterranean. “So there’ll be a bigger hit there than in northern Europe. “Northern Europe will observe a drop in the range of 8 or 10 per cent. “It is a suspect more than anything else, but it seems to be of that magnitude.”
Italy and Spain will be the second and members of the eurozone, with the two nations facing the looming threat of a downturn as well as preexisting struggles leftover from the European debt crisis and the 2008 global financial crisis.
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