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In an interview with German newspaper Sueddeutsche Zeitung, the test of which will be published on Monday, the European Union’s (EU) Competition Chief Margrethe Vestager expressed her displeasure towards the “huge differences” between the EU member states, with regard to the Coronavirus Recovery Fund, as cited by Reuters.

She added that this discrepancy is distorting the bloc’s single.

Key quotes

“There was a risk that the different levels of state aid among member states would distort competition and slow the economic recovery from the coronavirus pandemic.”

“And this has already happened to a certain extent.” 

When asked about an EU recovery plan expected to be announced on May 27, Vestager said “there were no guarantees that it would be sufficient but said officials were trying to do their best.”

“I cannot give a forecast of how member states will react to the draft,” she said, adding that she “would not be surprised if the proposal sparked different opinions.”

Market reaction

EUR/USD is posting small gains above 1.0822, benefiting from broad-based US dollar weakness following the US Federal Reserve (Fed) Chairman J. Powell’s “ready to do more” comments.

At the press time, the spot trades at 1.0822, up 0.09% on a daily basis but the impending EU virus recovery fund and Brussels-Germany tussle could keep the gains in check.