Euro Zone Business Growth at 15-Year High

Eurozone leading Composite Purchasing Managers Index (PMI), announced by IHS Markit, realized the fastest growth in 15 years, hitting 59.2 in June versus 57.1 in May.

Services and manufacturing PMIs, which make up the composite PMI index, also rose above expectations to 58 and 63.1 points, respectively. The growth in the service sector reached the highest level in the last 41 months.

Meanwhile, business confidence in the outlook rose to its highest level since the first-ever future sentiment data in 2012, bolstered by the recent surge in demand and expectations for further opening the economy in the coming months.

Manufacturing continued to lead the rise, reporting a twelfth consecutive monthly increase in output as the pace of expansion rebounded, albeit slightly below its March record level.

Production growth was again the sharpest in Germany, and France outpaced the rest of the region with a slower rate of new order growth. Commenting on the flash PMI data, Chris Williamson, Chief Economist at IHS Markit, said:

“The eurozone economy is booming at a pace not seen for 15 years as businesses report surging demand, with the upturn becoming increasingly broad-based, spreading from manufacturing to encompass more service sectors, especially consumer-facing firms. “

The European Central Bank estimated earlier this month that the eurozone would grow at a rate of 4.6% this year and 4.7% next year — a more robust outlook from its March assessment.

However, economic uncertainty persists, owing to the delta coronavirus variant’s increased infection incidence as well as labor shortages — even in countries with relatively high unemployment rates.

EU Launches Italy’s ‘National Recovery Plan’

European Union (EU) Commission President Ursula von der Leyen, together with Italian Prime Minister Mario Draghi, launched Italy’s National Recovery and Resilience Plan (NRRP or PNRR in Italian) for 191.5 billion euros to be allocated to Italy from the EU’s recovery fund to alleviate the economic effects of the coronavirus epidemic.

“It is a day of pride for our country. The Italian plan fully responds to the priorities established by the Commission”, Prime Minister Mario Draghi told a press conference with European Commission President Ursula von der Leyen.

The recovery money must be “all be spent, but above all spent well, efficiently, effectively, but also honestly: in recent weeks we have already made important steps” on the first reforms, “such as governance and simplifications,” Draghi added.

Mario Draghi stated that all Italians and themselves as the government should make good use of this resource, which comes from people’s taxes in other EU member countries.

Italy can count on “the full support of the European Commission,” said the EU’s Commission chief, who also called the Italian plan “ambitious and far-sighted.”

“This is a once-in-a-lifetime opportunity. It’s an opportunity to put things in order and start over.” Von der Leyen said that Italy should carry out a series of competitive reforms and reforms in finance and the judiciary, primarily aimed at shortening the duration of the litigation.

Italy is set to receive €24.9 billion by July and a total of €191.5 billion by 2026 – of which €68.9 billion will come in the form of subsidies, €122.6 billion in loans.

Biden Plans High-Level Talks With Beijing

US President Joe Biden plans to formulate his China policy through talks with senior Beijing officials.

The Biden administration, which keeps the issue of China at the top of the agenda at the G-7 and NATO summits, aims to hold high-level talks with China.

Three sources familiar with the matter, speaking to the Financial Times, reported that US Secretary of State Antony Blinken and his Chinese counterpart, Wang Yi, evaluated the G-20 meeting in Italy.

President Joe Biden’s government has indicated that it wants to send Deputy Secretary of State Wendy Sherman to Beijing.

The White House is also considering holding a meeting between Xi Jinping and Biden.

Biden stated that he would follow a “patient” approach towards China in the first months of his presidency, focusing on domestic politics and strengthening alliances.

This decision comes after months of talks with Washington’s successful response to the Covid-19 pandemic and its allies at various summits, including the G-7 summit to denounce China’s behavior.

It is stated that Biden’s decision will receive criticism from people who have a hawkish attitude. Still, the business world, which is concerned about deteriorating relations, will be pleased with the decision.

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