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FRANKFURT (Reuters) - The European Central Bank must keep its money taps fully open, as the euro zone economy is still in the throes of the coronavirus pandemic despite progress in vaccination campaigns, ECB policymaker Yannis Stournaras said.
FILE PHOTO: Bank of Greece Governor Yannis Stournaras attends the annual meeting of the bank s shareholders in Athens, Greece April 1, 2019. REUTERS/Costas Baltas
ECB rate-setters will review the pace of emergency bond purchases at their June 10 meeting against an improved economic backdrop. Growth and inoculation rates are rising in the bloc as COVID-19 cases fall.
However, in an exclusive with Reuters, Stournaras said the recovery remained fragile and, with no evidence to point to an era of high inflation in the foreseeable future, it was too early for the ECB to slow down emergency bond purchases.
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LISBON, May 25 (Reuters) - Portugal’s Economy Minister said on Tuesday last week’s ruling by Europe’s second-highest court against a 1.2-billion-euro rescue loan to TAP airline did not hinder negotiations on its restructuring plan and TAP could continue using that money.
The Luxembourg-based General Court on Wednesday upheld Ryanair’s fight against the rescue loan TAP received in 2020 from the state, with the European Commission’s blessing, on the grounds that European regulators failed to justify the huge cash injections.
“This decision that the court took for formal reasons, over a lack of adequate reasoning, does not have an immediate impact, nor does it suspend the possibility of TAP continuing to benefit from the loan,” Pedro Siza Vieira told Reuters.
By Reuters Staff
(Adds detail on costs and debt, Vanhanen’s quotes)
HELSINKI, May 25 (Reuters) - Finland on Tuesday said it would add 2.36 billion euros ($2.89 billion) to the state budget to help to curb the effects of the coronavirus pandemic on the economy and welfare.
This comes on top of the country’s original budget for 2021, for which there was already a proposal in April to increase it to 65.9 billion euros.
The additional budget includes 2.17 billion euros for increased costs and 0.19 billion for lost income, outgoing Finance Minister Matti Vanhanen said in a news conference.
“The pandemic is hopefully soon behind us but it has a long tail of economic consequences which can be seen in this budget,” Vanhanen said.
World FX rates tmsnrt.rs/2egbfVh (Updates Asian shares, adds Fed official comments)
HONG KONG, May 25 (Reuters) - Asian shares climbed in morning trade on Tuesday, tracking a Wall Street rally overnight, while the dollar held near a fourth-month low as investors tempered fears about inflation-driven rate hikes.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1% at a two-week high, after U.S. stocks ended the previous session with mild gains.
Australian shares were up 0.69%, while Japan’s Nikkei stock index rose 0.6%.
Chinese stocks hit a 2-1/2-month high on financial services, consumer and tourism gains in morning trade. The blue-chip CSI300 index jumped 1.89%, while the benchmark Shanghai Composite Index advanced 1.39%, reaching their highest levels since early March.
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LONDON (Reuters) - Emerging economies from Peru to Romania are in the firing line as looming U.S. tapering raises the risk of outflows from local currency bond markets, hitting a vital funding source for governments striving to recover from the coronarvirus crisis.
As the U.S. economy edges back to health, the Federal Reserve is wrestling with the question of when to begin unwinding its monthly $120 billion in asset purchases that has flooded markets in the aftermath of the pandemic.
Any tapering could be bad news for some emerging local bond markets, which make up more than 80% of developing nations’ fixed income universe and form the bedrock for government finances. Local emerging debt sucked in foreign flows of at least $149 billion over the last year, the bulk of to China.