EUR bearish bias on EZ crisis in many parts – BBH

By FXStreet FXStreet (Guatemala) – Analysts at Brown Brothers Harriman explained that the EU is warning that Austria, Italy, and Lithuania are at risk of not achieving their 2016 budget goals.

Key Quotes:

“It also warned Spain that is too may miss its target. Nevertheless, the EU said there were no serious violations. At the same time, the EU will exempt proven refugee spending from the budget scorecard. In light of the attack on Paris, the EU’s fiscal discipline faces a new challenge. French President Hollande is arguing that the security pact trumps the stability pact. France is at war, and the Lisbon Treaty requires its EU allies are obligated to help.

France had already had received special dispensation of its fiscal excesses. Under the agreement, France was supposed to achieve a 3.4% budget deficit in 2016 and 3.3% in 2017. However, these fiscal targets have been effectively jettisoned. The increased security spending may see the deficit move in the opposite direction. The French deficit this year was expected to be near 3.9% of GDP, assuming GDP itself expands by 1.1%. France may not reach the 3% threshold this decade. …read more

Source:: FX Street