Austerity not coming any time soon
Top EU officials will outline a plan to suspending debt rules on Wednesday before the decision in May, according to a report from Bloomberg.
Public finances are in a bad spot in periphery countries but globally there is a huge push to spend coming out of this crisis. Moves to keep the fiscal taps open aren't a surprise but they add upside risk to an economy that will undoubtedly be vaccinated before year-end.
Right now the EU is lagging the US but the timing mismatch will resolve itself later and could eventually lead to euro outperformance, though certainly not in the next six months.
The commentary highlights the delicate job politicians will have to do everywhere to withdraw support and get budgets back to sane levels.
A larger long-term risk for the eurozone is that they drop fiscal rules altogether; though re-writing the stability and growth pact would be a technocratic and political nightmare.
