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Eurozone blog ‘Euro intelligence’ criticised Europe for its “complacency” and warned “financial globalisation is deeply flawed”. And in a second swipe, they made the same warning about “European integration with a single currency”.
Researchers wrote: “Our view has been that financial globalisation was a deeply flawed process.
“So is European integration with a single currency but without a political union.“The last thing Europeans need is a return to the status quo ante before the monetary union.
“But the current state is equally unsustainable.”
It comes as EU members have shifted away from globalisation to avoid reliance on other countries during the coronavirus pandemic.
Meanwhile, cracks emerged in the 27-member bloc, who put on a united front in Brexit talks, bitterly divided over how to finance the bloc’s economic recovery in the face of the COVID-19 crisis.
The coronavirus pandemic has laid bare cracks in the EU’s unity as members wrestled over how to react to the pandemic since it hit Europe.
The invisible killer disease has claimed tens of thousands of lives in Europe and measures to curb its spread have left economies at a virtual standstill.
Wealthy, fiscally conservative countries like Germany, Austria, Denmark, Sweden and the Netherlands rejected calls by the bloc’s ailing southern economies, led by Italy, France and Spain, to sell joint “coronabonds” to restart growth.
But a deal was finally done on a recovery fund for the bloc’s pandemic-stricken regions and industries.
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Some claim the unprecedented package moved the EU one step closer to full-blown federalism by sanctioning the European Commission to undertake mass borrowing to pay for the rescue package.
The €750 billion recovery fund was radically overhauled during more than 92 hours of bitter wrangling between prime ministers, presidents and their closest aides.
Meanwhile, the Brussels bloc was dealt a major blow today when flash eurozone manufacturing and services purchasing managers index (PMI) numbers for August were worse than expected.
IHS Markit’s flash Composite Purchasing Managers’ Index, seen as a good gauge of economic health, sank to 51.6 from July’s final reading of 54.9.
The single currency, which had been falling before the results were released, extended losses and dropped as much as 0.6 percent to $1.1784, a one-week low.
Michael Hewson, analyst at CMC Markets, said: “The latest flash PMI data for August in France and Germany would appear to point to a plateauing in economic activity, particularly in the services sector, where rising infection rates here could well be tempering economic activity on the margins.”
Jessica Hinds at Capital Economics added: “The fall back in the eurozone composite PMI in August suggests the initial V-shaped rebound following the lifting of the lockdowns is already fizzling out.”
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