Ahead of European Commissioner Jean-Claude Juncker’s state of the union address on Wednesday Robert Bergqvist, Chief Economist at SEB, a leading Nordic corporate bank, looks to the EU to make bold economic and monetary decisions:
“The euro zone is finally facing economic tailwinds with declining unemployment. Now is the right time to make bold political decisions about how the EU and the euro will look like from 2025. The EU has a make or break situation but with an unclear ending. But do we have support from the EU and euro zone citizens for these steps towards the united states of the EU/euro zone?
“President Juncker’s state-of-the-union speech is expected to mark the beginning of a very interesting autumn. The renewed German-French leadership duo will look to the European Parliament election in late spring 2019, with the ambition of launching multi-speed EU cooperation in 2025. The paper presenting a roadmap towards the completion of the economic and monetary union by 2025 is ambitious and may have great implications for non-euro countries such as Sweden.
“If the euro zone also increases its integration and takes steps towards a fiscal policy union with Germany as ‘guarantor’”, this will decrease pressure on the European Central Bank (ECB) to maintain negative interest rates and make simulative bond purchases. The economic and political momentum will increase investors’ appetite for euro assets and should help bolster the euro.”