The leaders of the European Union reached early Tuesday a historic agreement on a major rescue plan for their economies that received a shocking blow from the coronavirus pandemic, after a fragile summit that lasted almost five days.
EU agreement
Leaders hope the 750 billion euro bailout fund and the 1.1 trillion euro 2021–2027 joint budget will help repair the damage by the deepest recession since World War II.
The agreement paves the way for the European Commission, the executive body of the EU, to raise billions of euros from the capital markets on behalf of 27 member states in an unprecedented act of solidarity in European integration.
The President of the Council of Europe, Charles Michel, described the agreement reached at 05:15 AM central continental time as “a pivotal moment” for Europe.
Many feared that a summit that would fail in the midst of the coronavirus pandemic would threaten the very survival of the bloc after years of economic crisis and Brexit.
After the deal, the euro reached 1.14697, the highest in the last four months against the US dollar (EURUSD).
The “frugal” countries led by the North that included Netherlands, Austria, Sweden, Denmark, and Finland made compromise after initially insisting that aid to Italy, Spain and other Mediterranean countries, which suffered the most from the pandemic, should be mostly in the form of loans, and not grants.
US Senate Fed hearing
Two highly controversial candidates whom US President Donald Trump nominated to Federal Reserve’s rate-setting board of directors are set to appear before the Senate Banking Committee today for approval.
The most controversial candidate Judy Sheldon who has harsh critics from both the Republican and Democrats is expected to gain narrow support from the Republican-controlled committee at the vote scheduled at 2PM eastern time.
The other candidate for the Fed Board of Directors is St Louis Fed’s research director Christopher Waller. He also is expected to get approval.
Shelton, a conservative economist, openly advocated as early as 2017 that it would be better to return to the gold standard and said she found the Fed’s power on money and financial markets “quite unhealthy.”
Vaccine hopes
Stock exchanges around the world have risen over positive data from trials of three potential anti-Covid19 vaccines, including one developed by the University of Oxford in England.
Investors shunning the risk flooded to the stocks and other risky assets as the US dollar fell to a four-month low of 95.62 on Tuesday.
In emerging markets, stocks have increased sharply due to unprecedented global stimulus programs, economic reopenings, and prospects for a possible coronavirus vaccine.
Asia-Pacific military tensions
The US navy said on Tuesday that the US conducted two separate military exercises this week with its allies Japan, Australia, and India in Asia-Pacific waters.
The exercises come days after the US rejected Chinese claims of sovereignty in the controversial South China Sea as illegal.
The US navy said the Carrier Task Force led by the Nimitz was in the Indian Ocean to conduct exercises with the Indian navy. Nimitz’s commander, Rear Admiral Jim Kirk, said the exercises with the Indian navy Monday helped increase the interoperability of the two countries’ forces.
The exercises took place near the Andaman and Nicobar islands of India, at the northern end of the Malacca Strait, one of the world’s busiest shipping routes for trade and energy.
The other exercise was led by Ronald Reagan aircraft carrier in the Philippine Sea with the participation of navies from Japan and Australia.
While establishing a front against China in trade and technology with the UK and Europe, Washington aims to encircle China with a military shield Asia-Pacific such with the help of its allies Japan, South Korea, Australia, Philippines, Vietnam, and India.
