All eyes are on Brussels ahead of the weekend
EU leaders are meeting today and tomorrow to negotiate on the recovery fund and hopefully seek a compromise in order to move forward from this whole ordeal, which has been dragging on since March up until now.
The can has been kicked down the road time and time again, so will this be different?
As things stand, Germany and France are happy with the latest proposal by the European Commission and the likes of Spain and Italy have to just "go with it" in hopes that they will at least get something before the summer.
However, the "frugals" are proving to be the key impediment as they are still not convinced by the mixture of loans and grants set out by the commission's proposal.
So, what can we expect over the next two days?
While there is a willingness to try and get something done, expectations for the most part are that things won't progress in smooth-sailing fashion.
I reckon if anything, there will be some progress to try and reach a compromise this weekend and things should be wrapped up on the 27-28 July summit instead.
The biggest difference this time around compared to the previous meetings is that there is much more at stake for European economies, considering time is of the essence in generating a firm fiscal response to deal with the fallout from the virus pandemic.
Not to mention, financial markets have calmed down on hopes that they will get something done and any setback before the summer will surely reverberate strongly in the euro area bond market and will also prove to be a major dent to the euro currency.
The bar for a compromise is actually really low considering the circumstances, and that in itself could still generate a further positive reaction in markets - not a whole lot - even though much of the optimism has been baked in already.
That said, it would be a positive surprise if they manage to achieve a compromise by tomorrow. I reckon the base case scenario is either negotiations stall and will be looked into again at the end of the month or there is progress but the details and official compromise will be settled in the coming weeks.
