Turkey’s temporary reprieve, EU budget proposals

Financial support for Turkey unveiled by Qatar and Japan this week reduce the immediate threat of another currency crisis. But the funds being provided pale into comparison with Turkey’s external financing needs and ongoing efforts to defend the lira will simply store up a sharper and larger adjustment further down the line. Meanwhile, the €500bn EU joint fiscal package proposed by France and Germany earlier this week to finance a post-crisis recovery would benefit those countries hardest hit by the coronavirus crisis but the support for Central and Eastern Europe may be limited.