A quick thread on today's @EUCouncil video conference - its basically all to play for, but signs are getting more promising. 1) The MFF is now clearly the vehicle of choice, which i) dictates the timetable, so nothing before Jan 2021 (sorry US/UK observers -fiscal integration 1/n

takes time :-) ) ii) enables "grant money" to be renamed into "EU budget spending" - politically useful; and iii) possibly unlock far more new MS money. 2) There will be a focus on investment - not perhaps the optimal fiscal multiplier in the short-run, but the "item" with 2/n

most political ability to unlock MS money (Merkel's Konjunktur program) and deals with the "conditionality issue" as EU decides together what the money goes to and investments should serve to raise potential growth. 3) @EU_Commission to propose raising own resources ceiling 3/n

temporarily from 1.2 to 2% of EU GNI - this implies if actual spending is raised by a similar amount an annual EU budget of potentially about EUR280bn, or EUR100+bn/year more than today. Say you do this for 3 years = say EUR320bn in new actual MS money in the next MFF + 4/n

"earmarked Corona-MFF envelope/Corona Fund" from 2021-23. @vonderleyen today also said @EU_Commission would be exploring "innovative financial solutions", clearly implying that the additional MFF money will be levered in jointly guaranteed new investment bonds. How agressive 5/n

a leverage is unknown but say 3-5x and you get roughly EUR1-1.5tr in jointly funded deployable resources in the coming years, enough (also with some additional "grant money" disbursed in the regular MFF) to be IMO both macroeconomically and politically (anti- @matteosalvinimi) 6/n

relevant in the EU. 3) Time matters, but unclear if a delay into the German EU presidency in 2H of 2020 for the details would be a disaster - until then PEPP/EuroGroup package operational in June is intended to do the trick - and Merkel can leave the political scene with a 7/n

legacy worthy of a German chancellor with a 80+% approval rating.... i.e. she better spend her CDU political capital NOW, rather than take it with her into retirement (where it won't do her successor any good either)! In sum, details to come, but much too early to declare 8/n

failure or even "too little too late". 30y EU bonds might not be consols, but they will do just fine for now and someone might actually buy them..... pitfalls include 1) "mobilizing resources" means to the @EU_Commission trying (again) to crowd-in private investment, which 9/n

would be meaningless in the current situation (NO Juncker Plan II please!); 2) 7y MFF is merely frontloaded, not genuinely expanded from 2021-23, so lots of ways the EU can still arrive at an inadequate package. For now though - I consider the glass half full. ENDS