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Capital markets: Reasons to be positive on Europe

The EU recovery fund could deliver so much more than just a short-term boost to peripheral sovereign bonds and European equities.


Euromoney has delved deep into the detail of just how the EU might conduct the large new borrowing programme for the €100 billion emergency SURE programme and the €750 billion recovery fund that was agreed in July. 

This programme was hailed as a breakthrough for joint sovereign issuance, with more heavily indebted and vulnerable nations receiving grants as well as loans at a cost subsidized by the credit strength of their wealthier neighbours.

But even if the EU funds this deftly on behalf of the European Commission, there is a much bigger and more important question.

Will it do any good?

Now, €850 billion is a respectable sounding sum of money. But as a one-off boost, it’s only around 6% of EU GDP for 2019. And while economies are tanking now, the recovery fund won’t even come into operation before next year.

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