The Day at a Glance | May 19 2020

Trump threatens to pull funding from the WHO

President of the United States, Donald Trump, threatened to cut off funding to the World Health Organization (WHO) and pull the US out of the group if it doesn`t commit to major improvements within the next 30 days. In a letter written to Tedros Adhanom Ghebreyesus, the Organization`s Director-General, Trump asks for the WHO to demonstrate independence from China, and actions that would allow transparency in finding out more about the virus`s origin, in addition to greater agility to share information to fight it. China has criticized the letter written by the US President and thinks that the US is merely looking to mislead the international community and intends to stop China`s efforts to control the pandemic. For Zhao Lijian, Foreign Ministry Spokesperson, the US has showed incompetence in how they have dealt with the pandemic and now pretends to take charge of the pandemic at a global level. Yesterday, China announced handing over $2 billion dollars to the WHO for the development of safe vaccines, testing, and treatments for the entire world. Both governments dispute their international leadership for controlling the pandemic.

Mnuchin and Powell will testify before the Senate

US Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell will testify about the Treasury and FED`s aggressive economic response in light of the pandemic before the Senate Banking Committee today. It`s likely that legislators will ask both how many more public resources are needed to shield the economy and achieve a fast recovery, as Congress starts to discuss a new fiscal package. It`s also expected that details and assessment will be brought up concerning the programs that have provided aid to households and businesses – in order to design better approaches in future packages. In Congress, extending current programs for a longer period of time is being considered instead of approving a more ambitious proposal offered by the Democratic party, who approved an additional $3 trillion dollar package last week.

France and Germany propose a recovery fund

Berlin and Paris came to an agreement yesterday and proposed a 500 billion euro package to be used for a Recovery Fund backed by European resources in efforts to aid the regions and sectors most affected by the virus. This news was received well in markets, as this shows a shift in Germany`s position regarding the recovery`s financing. According to Angela Merkel, the debt issued by the European Commission would be paid with the Union`s budget, to which Germany contributes around 20% of the total (the largest amount by any country in absolute terms). The European Commission will present a proposition of its own next week, which will be discussed and could include a larger amount of resources in the form of loans. In Europe, still pending is the approval of an economic package that allows recovery in the medium and long term, however, the advancements made by both of the European Union`s founding countries improve the outlook. Several countries in the region have begun to ease mitigation measures and a slight recovery is already being seen in fundamental activities such as the mobility of people and energy consumption.