EU At War As Rudderless Ship Sinks As Rescue Deal Founders

By |

Europe is beginning to sink under the economic stress of the coronavirus outbreak as France enters recession and Eurozone leaders are deadlocked over a financial rescue package.

The 19 countries in the Eurozone bloc cannot agree on the financial terms underlying the deal.

They all understand action is required, but they are split over the details of issuing bonds to shore up their economies.

The two largest Eurozone economies are in trouble.

France is heading for a slump and Germany is tackling a record drop in business.

France and Germany in recession

The Bank of France, the country’s central bank, says a 6% fall in GDP is anticipated for the second quarter of 2020, while Germany is expecting an even more severe 9.8% fall.

Stock markets in Europe reacted poorly to the news.

Just before closing the FTSE 100 was 0.85% down to 5655.91, but the FTSE 250 was a little more hopeful, with a gain of 1.89% to 15862.83.

Across Europe, markets were a sea of red – the CAC40 in Paris saw no change at 4438.27; the DAX in Frankfurt slid 0.23% down to 10332.89 and the IBEX in Madrid dropped 0.72% to 6951.80.

Recently, the markets had risen on hopes that the coronavirus crisis was abating as the death toll fell, but the weekend has seen another grim rise in figures in Spain, Italy, the UK and America.

However, the numbers did not seem to worry the Americans too much.

Mixed fortunes

In New York, early trading saw the Dow Jones up 2.6% to 23242.80 and the NASDAQ rise 2.02% to 8046.73. Across in Chicago, the S&P 500 followed with a 2.35% increase to 2722.03.

Overnight, the Asian markets returned mixed fortunes.

The Hang Seng in Hong Kong closed down 1.17% at 23970.37, while the Nikkei in Tokyo was 2.13% up to 19353.24.

The Pound rallied against the major currencies – up 0.48% to $1.2398 against the US Dollar; up 0.70% to €1.1408 versus the euro and 0.38% to ¥134.75 against the Japanese yen.

The price of a barrel of Brent Crude Oil fluttered up to 1.38% to $32.31.

An ounce of gold is changing hands at £1,329, edging back on news of the Eurozone troubles.

Leave a Comment