"The extension of JobKeeper and JobSeeker? A lifeline for the Australian economy"

The economic and financial issues of the week analysed by the UNSW-Canberra professor of finance, Massimiliano Tani.

Australian Prime Minister Scott Morrison (right) and Australian Treasurer Josh Frydenberg speak to the media. Source: AAP Image/Lukas Coch

The Morrison government has listened to the incessant requests from the private business community and announced yesterday an extension of the JobKeeper and JobSeeker programs.

This announcement has removed the aura of uncertainty that was looming over the future of the Australian economy from next September, offering a real lifeline to thousands of private companies.

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• The JobKeeper and JobSeeker programs have been extended until March 2021.
• The European Union takes a historic decision and starts to issue a common public debt.
• Italy will be the recipient country of the largest share of the Recovery Fund for a total of 209 billion euros.

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However, the question remains unresolved as to what measures the government will take in terms of large-scale investment.

New defence programmes have been announced in recent weeks, as well as incentives for the film industry, but these do not seem sufficient to get the Australian economy back on track. The government could consider major investment in renewable energy or social housing.

Meanwhile, a historic compromise has been reached in Europe among the member countries of the European Union, which for the first time will issue sovereign debt, guaranteed by the Union itself.

The approval of the Recovery Fund came after strenuous negotiations between the frugal countries of northern Europe, led by Mark Rutte's Netherlands, and the other member countries.

Italy will receive as much as 28% of the funds allocated by the European Union, which will be used for investments aimed at relaunching the economy.

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