EU Ministers Agree Half A Trillion Euro Coronavirus Rescue Plan

European Union finance ministers agreed on Thursday on half-a-trillion euros worth of support for their coronavirus-battered economies but left open the question of how to finance recovery in the bloc headed for a steep recession. The agreement was reached after EU powerhouse Germany, as well as France, put their feet down to end opposition from the Netherlands over attaching economic conditions to emergency credit for governments weathering the impacts of the pandemic, and offered Italy assurances that the bloc would show solidarity.

But the deal does not mention using joint debt to finance recovery - something Italy, France and Spain pushed strongly for but which is a red line for Germany, the Netherlands, Finland and Austria. It only defers to the bloc’s 27 national leaders whether “innovative financial instruments” should be applied, meaning many more fraught discussions on the matter were still ahead. “Europe has shown that it can rise to the occasion of this crisis,” said French Finance Minister Bruno Le Maire, praising what he said was the most important economic plan in EU history.

Earlier on Thursday, 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 COVID-19 pandemic caused by the novel coronavirus. For weeks, EU member states have struggled to present a united front in the face of the pandemic, squabbling over money, medical equipment and drugs, border restrictions and trade curbs, amid fraught talks laying bare their bitter divisions. While Le Maire said the Thursday agreement paved the way for debt mutualisation, his Dutch counterpart, Wopke Hoekstra, stressed the opposite. -Full Report

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