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2021/05/12 / Erste Group Research

EU recovery plan coming – also to financial markets

The European Commission's recently published spring economic forecasts showed a better assessment of economic activity this year and next than at the beginning of the year. A major reason for the upward revision was the prospect of the impact of the European Recovery Plan (Next Generation EU). Once the legal foundations are in place, the European Commission will start issuing bonds to finance Next Generation EU, which could be as early as June.

In view of the rapid vaccination progress and opening steps already taken in some Eurozone countries (e.g. Spain), we expect a significant rise in services sentiment in May (published on May 21). In contrast, we expect sentiment in industry to flatten out or fall slightly from the historical highs in April.

The dynamic rise in global commodity prices has caused uncertainty in recent weeks. However, despite the recent increases, prices of major commodities are still below historical highs. The key question is whether the current rise in commodity prices could have a lasting impact on Eurozone inflation.

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General information

AuthorErste Group Research
Product nameWeek ahead
Topic in focusMacro/ Fixed income
Economy in focusEurozone, United States
Currency in focusEuro, US Dollar
Sector in focus-


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