Demonstrations have broken out in 75 US cities, with governors and mayors deploying the National Guard or imposing curfews on a scale not seen since the aftermath of the assassination of Martin Luther King in 1968.
As noted in Saturday’s commentary, “the anger expressed on the streets of US cities is a political and economic risk that may need to be recognised (by US equity markets) over the long, hot summer months”.
The Eurozone offers quite a contrast. The political unity, between France and Germany, recognising mistakes made early in the Covid-19 crisis including the lack of support for Italy, is bullish for the euro. The ‘Green New Deal’ is designed to bring the Eurozone together. President Trump’s tweets are sewing division and disunity.
The European Commission’s executive vice-president was unequivocal. The old economy is out: the €750bn recovery programme will only be available for countries and companies that offer ‘green transition plans’.
Europe’s start-ups have taken a different approach from their US counterparts. There have been fewer layoffs, partly some claim, because their expansion by and large had been less frenetic. But government furlough schemes have helped too, and rescue plans have been tied to job security.
Start-ups are still hiring across Europe. But it should be stressed, there are many more examples in Germany, vis-à-vis other core members of the Eurozone, underlining the importance of a unifying, Green New Deal.
