EU finance ministers have decided to a € 500 billion rescue package (£ 430bn;$540bn) for European countries hard hit by the coronavirus pandemic. The Eurogroup president, Mário Centeno, confirmed the deal, which was reached in Brussels after marathon negotiations. It comes as the prime minister of Spain said the country was close to getting through the worst of its coronavirus outbreak.
Spain has the largest number of reported cases in Europe, with 152,446 cases. More than fifteen thousand people died. The head of the International Monetary Fund (IMF) informed the world faced the worst economic crisis since before the 1930’s Great Depression. Kristalina Georgieva said this year that the coronavirus pandemic would turn economic growth “sharply negative.”
In their talks in Brussels, EU ministers refused to acknowledge a proposal from France and Italy by issuing so-called corona bonds to share the expense of the crisis. The eventually decided package is smaller than the ECB had urged. The ECB has suggested that the eurozone will need up to € 1.5tn (£ 1.3tn) to resolve the crisis. The deal was, however, praised by French finance minister Bruno Le Maire as the most successful economic strategy in EU history.
The key part of the stabilization package is the European Stability Mechanism. Also, the EU bailout fund, which would make € 240bn available. This is to guarantee investment from under pressure from indebted countries. The EU ministers have agreed on other steps. It includes € 200bn in European Investment Fund guarantees. Also, programme by the European Commission for national short-term job schemes. Ministers came close to an agreement on Wednesday. But the negotiations broke down and had to resume a day later. This is in the middle of a disagreement between Italy. Also, the Netherlands about how to administer the recovery fund.
