German Chancellor Angela Merkel told European Union leaders she’s ready to back a huge stimulus package to rebuild the economy after hearing a dire assessment of the outlook from the central bank president.
On a videoconference that began on Thursday afternoon, Christine Lagarde told heads of government that the European Central Bank sees the euro-area economy shrinking by as much as 15 per cent as a result of the pandemic, and that they risk doing too little, too late, according to sources.
One of the officials said the 15 per cent figure was the extreme scenario, with the ECB president saying her baseline estimate is a 9 per cent cut in output this year.
Mrs Merkel indicated that the EU should double the €540 billion (Dh1.98 trillion) rescue plan drawn up by finance ministers two weeks ago, officials said, as leaders set out their proposals for mitigating the economic fallout from the virus.
With more than 100,000 fatalities in the region, Europe has been hard hit by Covid-19 and the fallout from the crisis has exposed long-standing divisions over who pays for what. Strict lockdowns have shuttered factories and halted travel, pitching the bloc into the worst recession in living memory while leaders have been arguing over how to spread the financial burden of the rebuilding effort.
European Commission President Ursula von der Leyen told the call that not even in the Second World War there was such deep contraction in output as the one expected this year and only in the Great Depression would they see anything of similar magnitude, according to two officials. But beyond the average figure, both the depth of contraction and the speed of recovery will be very uneven due to differences in fiscal space among countries, distorting the level playing field in the bloc’s single market, Ms von der Leyen warned.
Yet despite that sobering assessment of the economic destruction, the meeting risked descending into a standoff between those member states demanding the recovery is funded via grants from a supercharged EU budget and those insisting the additional funds should take the form of loans.
An EU official said the commission will be asked to come up with a compromise proposal on the budget bridging the disparate views and no decision is expected on Thursday. According to the draft of the commission’s plan seen by Bloomberg on Wednesday, some disbursements will be loans and the other half will be effectively handouts.
Economic data on Thursday illustrated the recession is proving to be worse than many early predictions. Measures of private-sector business activity plunged more than expected to an all-time low, and signalled record job cuts. Corporate and consumer confidence slumped in the bloc’s biggest economies.
So far most fiscal action has been by national governments, raising fears among officials and investors that an uneven response will tip the currency area into another financial crisis later on.
The ECB has led the European-level response, pouring liquidity into the financial system and taking steps to ensure the cash can reach deep into the euro zone.
It has pledged to buy more than €1 trillion of debt over the rest of this year, and removed most of its self-imposed limits to allow it to target areas of market such stress such as Italian bonds. It has also ramped up programmes making it easier for banks to lend to virus-hit companies, including accepting some junk-rated debt as collateral.
Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
Keane on …
Liverpool’s Uefa Champions League bid: “They’re great. With the attacking force they have, for me, they’re certainly one of the favourites. You look at the teams left in it - they’re capable of scoring against anybody at any given time. Defensively they’ve been good, so I don’t see any reason why they couldn’t go on and win it.”
Mohamed Salah’s debut campaign at Anfield: “Unbelievable. He’s been phenomenal. You can name the front three, but for him on a personal level, he’s been unreal. He’s been great to watch and hopefully he can continue now until the end of the season - which I’m sure he will, because he’s been in fine form. He’s been incredible this season.”
Zlatan Ibrahimovic’s instant impact at former club LA Galaxy: “Brilliant. It’s been a great start for him and for the club. They were crying out for another big name there. They were lacking that, for the prestige of LA Galaxy. And now they have one of the finest stars. I hope they can go win something this year.”
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Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Should late investors consider cryptocurrencies?
Wealth managers recommend late investors to have a balanced portfolio that typically includes traditional assets such as cash, government and corporate bonds, equities, commodities and commercial property.
They do not usually recommend investing in Bitcoin or other cryptocurrencies due to the risk and volatility associated with them.
“It has produced eye-watering returns for some, whereas others have lost substantially as this has all depended purely on timing and when the buy-in was. If someone still has about 20 to 25 years until retirement, there isn’t any need to take such risks,” Rupert Connor of Abacus Financial Consultant says.
He adds that if a person is interested in owning a business or growing a property portfolio to increase their retirement income, this can be encouraged provided they keep in mind the overall risk profile of these assets.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Fund-raising tips for start-ups
Develop an innovative business concept
Have the ability to differentiate yourself from competitors
Put in place a business continuity plan after Covid-19
Prepare for the worst-case scenario (further lockdowns, long wait for a vaccine, etc.)
Have enough cash to stay afloat for the next 12 to 18 months
Be creative and innovative to reduce expenses
Be prepared to use Covid-19 as an opportunity for your business
* Tips from Jassim Al Marzooqi and Walid Hanna
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The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
Poacher
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THE SPECS
Engine: 1.5-litre turbocharged four-cylinder
Transmission: Constant Variable (CVT)
Power: 141bhp
Torque: 250Nm
Price: Dh64,500
On sale: Now
Mohammed bin Zayed Majlis
Fixtures and results:
Wed, Aug 29:
- Malaysia bt Hong Kong by 3 wickets
- Oman bt Nepal by 7 wickets
- UAE bt Singapore by 215 runs
Thu, Aug 30: UAE v Nepal; Hong Kong v Singapore; Malaysia v Oman
Sat, Sep 1: UAE v Hong Kong; Oman v Singapore; Malaysia v Nepal
Sun, Sep 2: Hong Kong v Oman; Malaysia v UAE; Nepal v Singapore
Tue, Sep 4: Malaysia v Singapore; UAE v Oman; Nepal v Hong Kong
Thu, Sep 6: Final
