Many investors have never been so confident on Europe

Klaus Regling, head of the European Stability Mechanism, at Forum The European House – Ambrosetti in September, 2020.

Michael Green | CNBC

Europe’s unprecedented stimulus plan has changed how many investors look at the region, the head of the euro zone’s crisis fund told CNBC Saturday.

Investors have often criticized Europe for its lack of coordination and weak institutions, especially since the sovereign debt crisis shook the bloc.

However, according to Klaus Regling, the head of the European Stability Mechanism — a crisis fund set up in 2012 — there’s a different opinion in the market now, after the European Union agreed to jointly raise funds to address the coronavirus crisis.

“Many people in the markets tell me: ‘We are more positive on Europe than the last 10 years  — ever,’ because of the quick reaction, the big volume of money and the good coordination,” Regling told CNBC’s Steve Sedgwick at the European House Ambrosetti Forum.

In May — about two months since strict lockdowns were imposed across Europe — the EU announced its first stimulus measures to support nations dealing with the economic shocks from the virus.

This was then escalated in July, when the 27 countries of the EU announced they would be raising 750 billion euros ($888 billion) in public markets to invest across the region. The plan still has some legislative hurdles to overcome, but it marks the first time that the group of nations has agreed to issue such a vast amount of common debt.

Markets welcomed the move, with some calling it Europe’s “Hamiltonian moment,” in reference to the deal struck by U.S. Founding Father Alexander Hamilton to convert previous debts into joint obligations of the federal union.

Some believe the deal opens the precedent for common debt issuances in future crises.

Speaking to CNBC, Regling also noted that the global response to the crisis had lacked coordination in comparison with the 2008 global financial crisis.

“But of course we know why it’s so different this time,” he said, citing that “the United States has moved away from multilateralism” and the “big conflict between China and the U.S.” 

Source link





Adult dependents may be eligible for money

Austin Goergen, a student at Oregon State University, started a petition last year to allow dependents ages 17 and up to qualify for...

Goldman Sachs CEO shuffles consumer banking, wealth management leaders

David M. Solomon, Chairman and CEO of Goldman Sachs, speaks during the Milken Institute's 22nd annual Global Conference in Beverly Hills, April 29,...

Here’s what Pence and Harris need to do in vice presidential debate

Kamala Harris and Mike PenceReutersVice President Mike Pence and Sen. Kamala Harris will lock horns in Salt Lake City on Wednesday night in...

2019 Genesis G70 Long-Term Test Update: The Dealer Experience

Genesis G70 Full OverviewWhen folks buy a car, most hope that's the last they'll see of the dealership. But in the luxury-car arena,...

Judge halts Trump administration order banning WeChat from app stores

The Tencent Holdings Ltd. WeChat app is displayed in the App Store on a smartphone in an arranged photograph taken in Arlington, Virginia,...