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EU agrees on bailout package worth half-a-trillion euros
10 Apr '20
2 min read
Pic: Pixabay
European Union (EU) finance ministers yesterday agreed on a bailout package worth half-a-trillion euros for COVID-19-hit members, but could not arrive at a consensus on the question of how to finance recovery in the bloc headed for a steep recession. French finance minister Bruno Le Maire termed the deal ‘the most important economic plan in EU history’.
While Le Maire said the agreement paved the way for debt mutualisation, his Dutch counterpart Wopke Hoekstra said his country will remain opposed to Eurobonds and he thought the concept will not help Europa or the Netherlands in the long-term.
Though Italy, France and Spain pushed strongly for using joint debt to finance recovery, which is a red line for Germany, the Netherlands, Finland and Austria, the deal did not mention it.
It only defers to the bloc's 27 national leaders whether ‘innovative financial instruments" should be applied, implying the issue will be discussed further, according to global newswires.
The agreement was arrived at after Germany and France put their feet down to end opposition from the Netherlands over attaching economic conditions to emergency credit for governments facing the impact of the pandemic, and assured Italy of a show of solidarity by the bloc.
The agreement now awaits approval from the bloc's 27 national leaders in the coming days. The package would bring the EU's total fiscal response to the epidemic to €3.2 trillion euros ($3.5 trillion), the biggest in the world.
A day earlier, Italian Prime Minister Giuseppe Conte warned that the EU's very existence would be under threat if it could not come together to combat the pandemic.
A scheme to subsidise wages will receive €100 billion so that firms can cut working hours, not jobs.
The European Investment Bank would step up lending to companies with €200 billion and the Euro Zone's European Stability Mechanism (ESM) bailout fund would make €240 billion of cheap credit available to governments.
While Le Maire said the agreement paved the way for debt mutualisation, his Dutch counterpart Wopke Hoekstra said his country will remain opposed to Eurobonds and he thought the concept will not help Europa or the Netherlands in the long-term.
Though Italy, France and Spain pushed strongly for using joint debt to finance recovery, which is a red line for Germany, the Netherlands, Finland and Austria, the deal did not mention it.
It only defers to the bloc's 27 national leaders whether ‘innovative financial instruments" should be applied, implying the issue will be discussed further, according to global newswires.
The agreement was arrived at after Germany and France put their feet down to end opposition from the Netherlands over attaching economic conditions to emergency credit for governments facing the impact of the pandemic, and assured Italy of a show of solidarity by the bloc.
The agreement now awaits approval from the bloc's 27 national leaders in the coming days. The package would bring the EU's total fiscal response to the epidemic to €3.2 trillion euros ($3.5 trillion), the biggest in the world.
A day earlier, Italian Prime Minister Giuseppe Conte warned that the EU's very existence would be under threat if it could not come together to combat the pandemic.
A scheme to subsidise wages will receive €100 billion so that firms can cut working hours, not jobs.
The European Investment Bank would step up lending to companies with €200 billion and the Euro Zone's European Stability Mechanism (ESM) bailout fund would make €240 billion of cheap credit available to governments.
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