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The euro discounts, after Calviño's defeat, a scam from the Nordics in the Recovery Fund

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Suffering in the euro after the defeat of the Minister of Economy, Nadia Calviño, in the presidency of the Eurogroup. The currency has been changed hands at $ 1.1265, from almost a month highs at $ 1.1370 and leaves a drop of 1%, discounting to forced marches an outcome in the Recovery Fund in which Northern countries prevail over the Franco-German axis and southern countries and demand harsh conditions in exchange for aid from the European Union (EU) after the pandemic.

The announcement by the President of the European Council, Charles Michel, of a proposal to convince the countries called 'four frugal' to get on board the Recovery Fund has given the off-duty to the currency that goes up to $ 1.1280. As expected, it has reduced the multi-year budget to 1.074 trillion (a 2.36% reduction), from the 1.1 trillion proposed by the European Commission – conservative countries were asking for 1.05 trillion – in exchange for getting them approved. the 750,000 million of the reconstruction, as reported by 'Reuters'.

However, the behavior of the currency is normal given that "It is a long-term bearish and was just rebounding", comments José María Rodríguez, analyst at Bolsamanía. The support to respect in the euro / dollar is at $ 1,1166. Only below this would we leave the door open at the end of the rebound at the crossing, "says the expert. In other currencies, the euro has fallen to a minimum of three weeks against the pound.

In addition to the blow for Calviño and for those who expected that his victory will signal the turn of the EU From the austerity that characterized the bloc during the 2012 credit crisis, towards a new pan-European solidarity by Covid-19, "there was no progress at the meeting of the EU finance ministers on the Recovery Fund," experts say. from Sudcen Financial. "This limited support for the euro," they say.

After a two-round vote, the Irish candidate, Pachal Donohoe, rose to the post of President of the Eurogroup, which he will assume from July 13, when the Portuguese Finance Minister, Mario Centeno, ends his term. He will take command just in time for the summit that the community bloc will hold on July 17 and 18 to address the measures that the EU will adopt to combat the ravages of the virus and a multi-annual budget endowed with 1.1 billion euros to relaunch the European economy.

For this to be possible, the countries will have to settle their differences, which mainly concern the volume of the fund, the proportion of aid in the form of grants or loans – the proposal of Germany and France, supported by the European Commission is 750,000 million euros: 500,000 million in transfers and 250,000 million in loans-, the access conditions and distribution criteria, as well as the 2021-2027 multiannual budget.

The centrist Irish politician has built a reputation as a consensus builder in his country and will have to bridge the gap between the so-called 'Four Frugal' – Holland, Austria, Denmark and Sweden – and southern Europe devastated by the virus as that the block traces its course out of the economic crisis. The main stumbling block is that the Nordic countries have been against the majority of assistance being through subsidies.

However, Donohoe, from the EPP, knows that the alliance of small countries in the north and east that has given him his support now hopes that it will favor his position. Also, this coalition of nations will stay in a week, when it comes to reaching an agreement on funds for reconstruction.

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