Euro surges after EU Commissioner for Economy Paolo Gentiloni indicated in a tweet today that they proposing a EUR 750B recovery fund, to add to the instruments already launched. It’s separately reported that the money would be split into EUR 500B grants and EUR 250B loans.
The EUR 500B grants is in line with the Franco-German proposal. The loan part is what surprised the markets today. Also, the larger package could help lower risk of slump in peripheral states, like Italy and Spain, which are heavily affected by the coronavirus pandemic. It could also increase the chance of a more balanced, synchronized recovery in the bloc. The kick-off date for the funding is set to be January 1, 2021.
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