(menafn – ecpulse)
After the ECB had allotted 800 European banks with 529.5 billion euros for 1,092 days on Wednesday in a second round of its Long-Term Refinancing Operation (LTRO) from 489 billion euros in the first round launched in December, eyes will focus on the EU summit two-day meeting starting on Thursday.
While some expected the meeting to tackle the issue of expanding the European permanent rescue fund to combat debt crisis, especially after the rejection of G20 nations to boost IMF resources before seeing expansion in euro area’s firewall, Jean-Claude Junker, Eurogroup President, said on Wednesday the summit will not include discussions of expanding the European lifeline.
He clarified that some European Parliaments have not finished their work on this issue, where he referred that it will be tackled by late March.
Instead, the meeting will focus mainly on Greece’s reform actions demanded by the EU and IMF to become eligible for receiving a second bailout worth 130 billion euros. They will review the progress is the debt swap deal reached with private-sector bondholders last week.
The EU want to make sure that Greece is on the right track to provide the debt-laden economy a first installment of the bailout by March 20, Junker said.
From Greece’s side, the Greek Parliament approved 3.2 billion-euro of spending cuts for this year with a majority of 202 versus 80 against, to become closer to receiving the aid package.
Moreover, the euro area, Germany and U.K. will release important manufacturing data. The final reading of PMI manufacturing in the euro zone will remain unrevised at 49.0, where in Germany the reading is also predicted to remain unrevised at 50.1. In the U.K., the reading is estimated to record an expansion of 51.8.
Thereafter, specifically at 10:00 GMT, the euro zone will release CPI estimate and unemployment rate where the former is estimated to inch down to 2.6% while the later will probably linger at 10.4%.
It seems that the euro area is facing a tough mission to lower unemployment while inflation is likely to remain above the ECB’s targeted level for a while.
Last month, the European Commission lowered its growth outlook for Europe as it expected a contraction of 0.3% for the euro area, down from the previously projected expansion of 0.5% in November.
So far, euro area officials are exerting more effort to abate debt crisis through pumping liquidity into markets, helping Greece to remain in the euro area, while may expand firewall to help other highly indebted nations in the region.