The Weekly Brief - J.P. Morgan Asset Management

The Weekly Brief

Contributor Global Markets Insights Strategy Team

Several European governments have used furlough, or short-shift schemes as a key part of their policy response to Covid-19.

The goal of these measures is to maintain a link between employee and employer, which in turn should enable a faster economic recovery once the medical situation allows. Labour markets across Europe certainly look healthier than they would have done without this type of support, although official unemployment figures may also currently be flattered by some quirks in the way that survey respondents are classifying themselves. Investor attention is now turning to negotiations on the European Commission's recovery fund proposal, which is designed to re-ignite growth in the worst hit parts of the continent. While the negotiations ahead still face challenges, European policymakers appear to be making significant strides forward in tackling this crisis together relative to the approach taken historically.

European policymakers aiming to minimise lasting labour market scars

% of total employment that have received government support

Source: Bundesagentur für Arbeit, INE, INSEE, Istat, ONS, Refinitiv Datastream, J.P. Morgan Asset Management. Guide to the Markets - Europe. Data as of 30 June 2020

The Weekly Brief (6 July 2020)

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