Eurozone: flash estimate, inflation drops to 0.1% in May

Eurozone: flash estimate, inflation drops to 0.1% in May

In May, due to the effects of the coronavirus emergency, the annual inflation rate in the 19 Eurozone countries fell to 0.1% compared to 0.3% in April: this was the first estimate released on June 1st by Eurostat. The performance of the index was affected by the 12% drop in energy sector prices (-9.7% in April). A 3.3% increase was recorded for food (3.6% in April). In May, according to Eurostat, inflation in Italy – the most affected country by the new coronavirus pandemic – was negative (-0.2%) against the + 0.1% recorded in April.

According to financial experts, the European Central Bank could announce Thursday hundreds of billions of euros in new bond-buying to keep fighting the COVID-19 pandemic crisis, as EU governments prepare to wrangle for months over a joint response. While some policymakers have urged dropping the ECB’s self-imposed limits on buying government debt to stoke increase and inflation, the meeting is also the first since a ruling by Germany’s Constitutional Court requesting restraint of the central bank’s powers.

ECB board member Isabel Schnabel reaffirmed last week that the size but also the composition and duration of PEPP could all be increased, with some analysts forecasting an extension from the end of this year to September 2021. As well as Thursday’s policy moves, eyes will be on June’s quarterly growth and inflation estimates from ECB staff, as January-March figures were compiled before the virus hit.

Bank president Christine Lagarde previously announced that the eurozone economy would contract by between eight and 12 percent in 2020, before a hoped-for strong rebound next year. Governors will encounter less than a month after a German Constitutional Court (GCC) ruling that a 2.6-trillion-euro bond-buying scheme launched in 2015 may not have been proportionate to its price stability goal and demanding clarification.

If the ECB cannot satisfy the judges, the German Bundesbank, the central bank, may not be able to participate in bond-buying. While finding a face-saving resolution to the immediate legal headache, policymakers must also consider how court challenges might limit their future options. Bank of France governor Francois Villeroy de Galhau last week said the so-called capital key, under which the ECB buys countries’ bonds in line with their stakes in its capital, is an “uncalled-for constraint”.

Free of limits, the central bank might choose to buy more Italian, French or Spanish debt to keep financial conditions on an even keel across the eurozone. But the self-imposed capital key rule was also shaped to avoid just the kind of legal tripwire that has sprung up in Germany. According to Lagarde, the GDP will drop more than during the last great financial crisis: the drop was between -4 and -5%, now it will probably be double. It will depend on how quickly we exit the lockdowns, on the gradual recovery, on the sectors affected. The president of the ECB added that she still does not believe in a new crisis of the single currency.

EU Council appointed new Force Commanders for Operation IRINI

EU Council appointed new Force Commanders for Operation IRINI

The European Council has decided to appoint as EU Force Commander for the EU military naval operation in the Mediterranean, EUNAVFOR MED IRINI, Rear Admiral Ettore Socci from Italy, from 6 May 2020 until 18 October 2020. He will be followed by Commodore Theodoros Mikropoulos, from Greece, from 19 October 2020 until 31 March 2021. Rear Admiral Socci was the Force Commander of previous Operation SOPHIA in Libya since June 2019. According to a statement released on Thursday, by EUNAVFORMED IRINI headquarter, Socci served as operational officer on board several warships of the Italian Navy, while Commodore Theodoros Mikropoulos has been the Commander of the Hellenic naval base in Souda Bay, near Crete, and before that held senior positions in the Hellenic Navy.

On 31 March 2020 the Council launched Operation IRINI with the primary purpose of enforcing the UN arms embargo in Libya, and appointed Rear Admiral Fabio Agostini from Italy as its Operation Commander, based in Rome, Italy. The EU joint mission commenced its activities at sea on May 4 with the French naval vessel Jean Bart and a maritime patrol aircraft contributed by Luxembourg. According to the High Representative of the European Union for Foreign Affairs and Security Policy, Josep Borrell, at the Berlin Conference, leaders agreed to work together towards a sustainable solution to the crisis in Libya. However, the conflict continues to put the lives of Libyans and the entire region at risk. Borrell affirmed adding that the effective enforcement of the UN arms embargo on Libya will help in achieving a sustainable ceasefire and advancing towards a political agreement.

Operation Irini, named after the Greek goddess for peace, was planned in a very short time frame and launched on 31 March, following a decision by the Council. The main task is the implementation of the arms embargo on Libya under the relevant UN Security Council resolutions. The Operation also has secondary tasks including monitoring illegal oil trafficking from Libya, contributing to countering human trafficking and smuggling activities through air monitoring and contributing to the training of the Libyan Coast Guard and Navy. The Force Commander will be assigned to Italy and Greece every six months alternatively. The rotation of the Force Commander will take place together with the rotation of the flagship. France, Germany, Greece, Italy, Luxembourg and Poland provided assets for the Operation.

EU proposes 750 billion Euros fund to restart pandemic-hit economies

EU proposes 750 billion Euros fund to restart pandemic-hit economies

EU proposes 750 billion Euros fund to restart pandemic-hit economies
The fund, dubbed Next Generation EU, will help European countries tackle job losses, growth and help stir their economies towards the Green Deal and digitalisation.

The European Commission announced the €750 billion proposal to tackle the “unprecedented crisis” precipitated by the coronavirus. Calling it “Europe’s moment”, Commission President Ursula von der Leyen said the fund will not only support its recovery but also invest in its future. The package is made up of grants and loan for each of 27 EU member states.

Currently, the proposal calls for €500 billion in grants and €250 billion in loans. These will be raised from the capital markets on the back of the EU’s strong credit rating and also by lifting the EU’s resource ceiling to 2% of its gross national income. The EU and its members will pay back the money raised on the capital markets over 30 years between 2028 and 2058.

Some of the southern countries who had been labouring under massive national debts even before the pandemic hit, were one of the first to welcome to move. Spain and Italy, which have seen a lot devastation in the wake of the coronavirus, have said that they would prefer grants rather than loans that would add to their public debt.

This breakup of grants and loans is less acceptable to countries like Austria and the Netherlands, which along with Demark and Sweden are called the “frugal four”, who want help to be extended more in the form of loans rather than cash handouts that would lay a disproportionate burden of recovery on them. While the EU and some of its members are anxious to get all the states on board and start disbursing the funds, these differences would first need to be settle, which is challenging in face of the travel restrictions in place across the continent.

The funds will be disbursed along with €1.1 trillion budget for 2021-27. This and the earlier €500 billion rescue package proposed by Germany and France, would bring the total amount available to the EU to €2.4 trillion.

Europe evaluates a 500 billion Recovery fund, most grants

Europe evaluates a 500 billion Recovery fund, most grants

The proposal on the anti-crisis recovery fund from Covid-19, which Ursula von der Leyen will present to the European Parliament the day after tomorrow, should not differ much from the plan of Angela Merkel and Emmanuel Macron. A € 500 billion recovery fund, active until 2022, made up for the most of grants, in addition to a European budget of around € 1,000 billion: these are the figures of the proposal that the EU Commission will present, according to Martin Selmayr, Commission representative in Austria, in an interview with the local news agency. Selmayr explains that the breakdown of loans and grants is still not definitive, but a 60% or 70% non-refundable loan should go.

Selmayr explained that for the Recovery fund, the vast majority will be subsidies, but the distribution percentage is not yet defined, although the ratio of grants to loans will be 60% or 70%, to 40% or 30%. Selmayr said to be confident that EU member States will reach an agreement by the summer. The countries will benefit from the Recovery funds through four channels, about 50% will be conveyed through the Recovery instrument, which supports the reforms and strengthens the resilience of the EU Member States, an instrument already included in the Eurozone budget.

The other half will go into three different channels: new cohesion funds, a fair transition fund, and the ‘Invest EU’ program, which supports strategic investments and supports liquidity for businesses. Selmayr also revealed that the EU Commission will propose new own resources, an emission tax for non-EU countries in addition to the plastic and the emissions trading system tax, and a tax for access to the internal market designed for large multinationals.

Measures that could bring up to 300 billion in the EU accounts. As for the EU budget proposal, Selmayr told the Commission is aiming for the figure under discussion already in February, that is above one thousand billion. And to satisfy the prudent, the discounts on contributions to the EU budget that some countries are already benefiting, including Denmark, Sweden, and Holland, will remain in force. The fact the plan draws a new economic instrument, born under the sign of COVID-19, designed specifically to open a new phase in Europe, directed by the crisis rather than by the will of individual states. A shock that is overwhelming the initial resistance of some countries like Germany and the 4 penalty takers.

COVID-19, latest measures adopted by EU

COVID-19, latest measures adopted by EU

Citizens around the world are worried. For their health, for their families, for their jobs, due to coronavirus. The pandemic is severely testing European governments and economies, and has pushed the European Union to move quickly to protect its international credibility. The Council of EU welcomed the World Health Assembly’s adoption on the importance of a collective response to the COVID-19. The 195 Member States of the World Health Organisation (WHO) have convened at the Assembly in unprecedented times, showing their determination to defeat the virus through collective, global action. A statement by the Council affirms, adding that the virus knows no borders, and neither should the EU response.

For Europe strengthening multilateralism is now more important than ever. The resolution underlines the importance of responding to this crisis through solidarity and multilateral cooperation under the umbrella of the United Nations. It sets out actions for every single State. For countries around the world, for the WHO and for other international actors, including civil society and the private sector. The role of equitable access to a vaccine in bringing the pandemic to an end is crucial. As a global, public health good it has to be affordable and accessible to everyone. Also, access to affordable equipment, medicines and treatments is vital. On 4 May, together with global partners, the EU launched a global pledging effort, which has so far gathered €7.4 billion from donors worldwide to ensure universal and affordable access to new solutions to detect, treat and prevent COVID-19.

Yesterday’s resolution recognises the need for engagement with the public through reliable information and the need to combat the proliferation of misinformation and disinformation. The resolution also recalls the need of an independent investigation of how this pandemic started and spread, as member States need to draw lessons from the current crisis to strengthen their global preparedness for the future. “By working together, united, and in solidarity, we will overcome this pandemic. Now is the time to work together. The health of each of us depends on the health of all of us”. The High Representative and Vice-President, Josep Borrell, and Commissioner Stella Kyriakides said in a joint press release.

As part of its emergency support package to tackle the economic impact of the COVID-19 crisis, the EU has put in place a temporary instrument to help workers keep their jobs during the crisis. According to the decision, EU member states will be able to request up to €100 billion in loans under favourable terms to help finance sudden and severe increases of national public expenditure in response to the crisis in specific areas. SURE (Support to mitigate Unemployment Risks in an Emergency) is one of the three safety nets, worth €540 billion, for jobs and workers, businesses and member states, agreed by the Eurogroup and endorsed by EU leaders. The EU is also adapting certain rules for different transport sectors to help companies and authorities cope in the extraordinary circumstances created by the coronavirus crisis. The Council adopted temporary measures enabling the extension of the validity of certain certificates and licences in road, rail and waterborne transport, and relaxing the rules on charging ships for the use of port infrastructures.

“Enabling the extension of the validity of licences and certificates will provide the flexibility and legal certainty needed to maintain our supply chains and ensure continued mobility by road, rail, sea and inland waterways, while safeguarding safety and security. The possibility of waiving port infrastructure charges will help mitigate the serious negative impact of the crisis on the shipping sector.” Oleg Butković, Croatian Minister for the Sea, Transport and Infrastructure, President of the Council, affirmed.

The regulation enabling the extension of the validity of certificates and licences will support those transport operators, individuals and national administrations that, owing to the coronavirus restrictions, are having difficulties fulfilling certain administrative formalities before the expiry of the relevant deadlines. This applies for instance to driving licences, roadworthiness tests for motor vehicles and boat-masters’ certificates. Certain periodic checks in the road, rail, inland navigation and shipping sectors will also be postponed temporarily, as they may not be feasible in current circumstances.

The text takes into account the fact that, given the differences in the spread of the pandemic throughout Europe, some member states are able to continue to deliver specific licences or certificates, while others -like Italy, France and Spain – find it difficult or impossible to do so. However, even if a country continues to issue licences itself, it will need to accept licences originating in another member state which has used the possibility of extending their validity. This will help ensure the smooth functioning of the internal market and continued cross-border activities.

On Wednesday, the Council also adopted a decision to provide up to 3 billion euros of macro-financial assistance to ten enlargement and neighbourhood partners to help them cope with the economic fallout of the COVID-19 pandemic. According to the text of the decision, financial assistance will be provided in the form of loans on highly favourable terms and allocated as follows: €180 million for Albania; €250 million for Bosnia-Herzegovina; €150 million for Georgia; €200 million for Jordan; €100 million for Kosovo; €100 million for Moldova; €60 million for Montenegro; €160 million for the Republic of North Macedonia; €600 million for Tunisia and €1200 million will be allocated to Ukraine. With the support from the International Monetary Fund, the funds will help enhance macroeconomic stability and create space to allow resources to be allocated towards protecting citizens and to mitigating the negative socio-economic consequences of the coronavirus pandemic.

How anxious children in Spain and Italy can teach us something about prolonged lockdown damage

How anxious children in Spain and Italy can teach us something about prolonged lockdown damage

In the lockdown situation worldwide, a UNICEF report has warned against long term emotional and psychological damage that it would do to children of all age groups.

Spain which has seen the longest lockdown period since the beginning of March has started to relax it a little bit. But while the grown-ups are getting to go out and dogs can also be walked, the children have been seen to be the worst affected.

Parents have reported medical conditions of stress in their children. Some are so afraid and nervous of stepping out that they are refusing to come out of the confines of home space. Others are nervous about encountering police tracking devices which blare out warning signs, in the middle of play time.

Play time has been restricted to certain number of hours and to a radius closest to the child’s home. Spain and Italy has also observed instances where police is said to have shone flood lights into homes in the middle of the night just to check on residents.

According to a New York Times report, a study conducted by Miguel Hernández University (under review by the journal Frontiers in Psychology) has examined the psychological impact of the confinement on children in Spain and Italy. The reports are startling. About 90 percent of 431 Spanish parents surveyed described emotional and behavioral changes in their kids, including difficulty concentrating, irritability and anxiety.

According to child psychology experts’ world over, the lockdown situations are going to have the worst effect on older people and children. The longer this situation goes on, the more of a concern it is, WHO reports say, adding that while we are still living through it, there are simple and effective ways to help children cope.

The Spanish chapter of Save The Children has already interviewed nearly 2000 Spanish families and found that more than 40 percent children are showing signs of pent us stress and anxiety. According to psychologist, post traumatic disorders can show immediate reactions. But denial can have long term impact on individuals. These can include unpredictable emotions, flashbacks, strained relationships and even physical symptoms like headaches or nausea. While these feelings are normal, some people have difficulty moving on with their lives.

These are things which can definitely affect children as much. While Italy has been able to do some justice and allow time out to children for short walks, Spain has not done so. According to Anne-Sophie Dybdal, senior child protection adviser at the mental health and psychosocial support unit of Save the Children, “People who are outside regularly have a lower activity in the part of the brain that focuses on repetitive negative emotions. This is one of the reasons children can slide into negative feelings or even depression during the circumstances they are living in now.”

According to a UN report, “Children today face anxiety about the negative impact of the pandemic on their lives and their communities, and uncertainty regarding the future. Further, for children facing extreme deprivations in the sense of food security or freedom to socialize, acute stress is a resultant that can impair their cognitive development and trigger longer-term mental health challenges.”

From what is happening in Spain, there are lessons to be learnt by nations across the world. Countries, will seriously need to think out their citizen betterment strategies placing utmost importance on the mental health and well being of children.

Coronavirus, Berlin: “Holidays in Italy and Spain? We need to talk about it”

Coronavirus, Berlin: “Holidays in Italy and Spain? We need to talk about it”

“With Italy and Spain, countries particularly affected by the coronavirus and where many limitations are still in force, we will have to talk.” German Foreign Minister Heiko Maas said, after a video conference meeting with the 10 EU countries that represent the Germans’ most popular destinations for the summer holidays. Berlin is not looking for bilateral agreements, but a coordinated and transparent process in the EU is needed. Maas explained.

Contagion trends are improving in many European countries, stated the German minister. “I hope everyone can have the situation under control at some point, so that we can travel to all countries again without reservations. But I don’t know if it will be possible for everyone this summer,” he added. “We will be very cautious. We do not want to give the impression that everything will be the same, regardless of where you go.”

The words of the German minister follow those of his Italian counterpart Luigi Di Maio, who has ensured that Italy will be ready to reopen its borders since June 3. According to Di Maio, free movement between the Regions will resume in Italy on that date, and European tourists will be allowed to enter. “Our facilities are ready.” He said adding that any blacklists between EU countries is inadmissible.

Spain could instead reopen its frontiers to foreign tourists starting from the end of June, when the Spanish will be allowed to move within the country. According to the Minister of Transport Jose Luis Abalos, from the end of June, Spain will restart tourism. I hope, if the withdrawal of the quarantine measures is going well, we can make Spain more attractive in terms of health.

Mutual travel deals, as proposed in a leaked European Commission document on 12 May, may be struck between countries with similar coronavirus risk profiles. For example, Estonia, Latvia and Lithuania have formed a ‘travel bubble’ allowing movement between those countries. The commission also plans to publish an interactive map where travellers will be able to check on border controls and travel conditions around Europe.

Belgium is aiming to reopen to international tourists by 15 June, and is likely to make an announcement by the end of May. Some indirect flights with the UK are operating for essential travel. Eurostar has a significantly reduced service, and public transport is running with masks mandatory. Also, France announced to reopen its borders, initially with Switzerland and Germany, from 15 June. In Greece, borders reopening to international tourists on 1 July at the earliest.

Government called over hypocrisy for Immigration bill against key workers in U.K.

Government called over hypocrisy for Immigration bill against key workers in U.K.

The home secretary, Priti Patel, is prepared to present the immigration bill to the House of Commons on Monday for its second reading. There are strong accusations against government for being of “rank hypocrisy” for the immigration bill closing doors for low skilled workers, while cheering for the NHS workers.

Nick Thomas-Symonds, Member of Parliament from Labour Party has urged Priti Patel to “think again.” He said, “I believe the government’s plan to rush through this immigration legislation is an insult to our incredible NHS staff and care workers.”

He further said, “It is frankly, rank hypocrisy from the government towards EU nationals – over 180,000 in England and Wales alone – who are currently working in our NHS and in the care sector, for ministers to stand and clap for them on a Thursday night, and then tell them that they are not welcome in the UK on a Monday.” He called this new policy as a threat to national interest.

Priti Patel however, describes the new bill as historic. This bill is the fruitful result of the promise of an “Australian-style points based system” that was outlined by Boris Johnson and Michael Gove in the Vote Leave campaign during 2016 referendum.

The bill can be easily passed with a Tory majority of 80.

Ms. Patel said, “Our new points-based system is firmer, fairer and simpler. It will attract the people we need to drive our economy forward and lay the foundation for a high wage, high skill, high productivity economy.”

Nick Thomas-Symonds pointed out that the government is however, continuously writing off the low skilled workers and care staff, while they are the ones who have been holding the nation’s economy and working through the times of crisis.

According to the new bill and points based system, the NHS visa rules will be fairly simple. The new system NHS visa would be of lower fees and rapid processing for the qualified overseas doctors who have secured a job in the NHS.

Complete details of the new immigration bill, that would be publicized later this year, will see equal treatment of EU and non – EU migrants. There will also be minimum salary thresholds to be expected as per the bill. The bill is set to come into action from January after the status quo transition period will end.

How Fissures Reappear Amongst EU Nations In Pandemic Times

How Fissures Reappear Amongst EU Nations In Pandemic Times

The pandemic led lockdowns is redefining the European Union’s interpersonal relationships in different ways.

According to Charles Grant, the director of the Centre for European Reform, there is tension brewing from all directions of EU. The pre-existing east-west division has widened at the time of Covid-19 disease breakout across the European Union.

It is a known fact that there has been a growing rift between Hungary, Poland and at times other central European states with the rest of the Europe union. Both countries have been in logger heads with EU nations as they went out to reshape their countries’ court system and public service media.

The other facts that have led to bad blood includes the distribution of irregular immigrants (in the recent past some eastern countries have even refused to take any), targets for reducing carbon emissions, with the easterners tending to depend on coal; and the rule of law.

When the whole world is trying to forget its differences and come together, central Europeans are once again refusing to help with sharing funds with those worst effected in the Southern parts of the European Union. The former don’t wish to lose money from the EU budget to the southern countries most afflicted by the virus.

Sadly so and putting aside all sense of compassion, Hungary’s Viktor Orbán has gone all out to say that the pandemic is being used as a justification for introducing rule by decree, exacerbating fears that he is creating a de facto dictatorship.

Additionally, the virus has been seen widening a European Union north-south gap as well. The pandemic has indeed taken this part of the EU back by a decade, it seems. This was time when the eurozone crisis had emerged. Germany, the Netherlands and their northern allies were reluctant to give substantial help to the southern countries in difficulty then.

History is repeating itself now and strangely, as the trend can be seen, the pandemic has struck the EU asymmetrically. The southern countries, particularly Italy and Spain, have suffered more coronavirus deaths than most others. No wonder, they have to cry out as they suffer from higher debt levels. Their suffering is further exasperated as their economy heavily depends on tourism, a sector badly hit by the pandemic.

The northerner does not want to help in the form of financial help, southerners are looking for the same. The south is looking for more Eurobonds or loans. But then, the south EU has already got a lot of loan to repay. The EU as a whole still plans to borrow money and then disburse it in the form of grants to the worst-affected countries.

EU leaders have agreed to set up a recovery fund to support the worst-affected regions. But it might be forced to provide more in the way of loans than grants, because the northern governments remain opposed to large-scale transfers to the south – a rather selfish strategy to not help. Wonder what would happen if the equation was to turn and the pandemic was to suddenly move to the North to the South!

WHO reports “COVID-19 may never go away”, Indicates long-term impact on Mental Health

WHO reports “COVID-19 may never go away”, Indicates long-term impact on Mental Health

World Health Organization has cautioned that coronavirus pandemic “may never go away”. The WHO experts indicated that the pandemic caused global mental health crisis might be impending.

The WHO on Wednesday warned against the nations trying to predict how long would the COVID-19 pandemic last. The emphasis was made on “massive effort” required to overcome this global health crisis.

Michael Ryan, Emergencies Chief at the WHO said, “It is important to put this on table: this virus may just become another endemic virus in our communities, and this virus may never go away.” He further elaborated, “I think there are no promises in this and there are no dates. This disease may settle into a long problem, or it may not be.”

The total detected cases of COVID-19 in the world has already crossed 4,527,000 with 303,413 deaths accounted for. The recovered cases globally have reached a tally of 1,705,815.

WHO’s Mental Health Department released a report stating that the COVID-19 pandemic might have a long lasting impact on the mental health of people globally and it might be the next looming crisis.

Devora Kestel, the director of mental health department at WHO said, “The isolation, the fear, the uncertainty, the economic turmoil – they all cause or could cause psychological distress.” She further said that the uncertainty doomed over the world has led to unprecedented times that are leading to stress among people, particularly the young and children. She stated that we must be prepared for an increase in mental illness, particularly among healthcare workers, children and young adults.

The statements followed an upsurge in COVID-19 cases in Russia making it the nation with second highest number of cases after U.S.

Wuhan in China, that reported the first cases of coronavirus and expected to be the place of origin of this pandemic, too reported a second wave of positive cases leading to panic around the world.

The U.S. President Donald Trump quoted his chief Infectious disease expert Dr. Fauci’s warnings against the pandemic as “not acceptable.”

As the countries race towards the vaccine development, these statements by WHO have raised panic among people as to the uncertain times ahead.

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