COVID-19: EU finance ministers finally together with $590B rescue plan

After having struggled over past weeks, finance ministers of the European Union have finally agreed on a 540 billion-euro ($590 billion) package of measures to combat the economic consequences of the novel coronavirus pandemic.

The overwhelming disagreements among the leaders had already thrown the EU’s future integrity into question. All the parties have finally managed to paper their differences and have reached to an understanding.

In an emergency teleconference on Thursday, the bloc’s finance chiefs agreed upon a plan to hold off what is predicted to be a recession of unprecedented magnitude. This deal is expected to, at least temporarily, bury the concerns about the EU’s supposed incapability of working together with a common plan when it was needed the most.

Huge disparities among the members broke out earlier this week when finance ministers failed to reach agreement on a joint response after whopping 16 hours of harsh discussions. Even on Thursday, the meeting began about five hours late as key countries of the EU including the France, Germany, Italy, Netherlands and Spain were negotiating for a settlement, a compromise that might be painful to most, but acceptable to all.

On Thursday, EU ministers broke out in applause once the agreement was struck in relief. It took only half an hour to succeed with the deal after the meeting began.

However, the deal still is not adequate considering the demands of Spain and Italy, countries that are hardest hit by the coronavirus pandemic. Moreover, it markedly avoided any reference to the issue of debt sharing.

The common response includes a 100-billion-euro worth joint employment insurance fund, a European Investment Bank instrument with a view to supplying 200 billion euros of liquidity to companies and credit lines of as much as 240 billion euros from the European Stability Mechanism, the euro area’s bailout fund, for supporting the states’ continuous expenditure to help economies get back on their feet.

In an official statement on Friday, European Council President Charles Michel said, “The agreement of the Eurogroup is a significant breakthrough... With this unparalleled package we should shoulder the burden of the crisis together.”

Now it is up to EU leaders whether they wish to reopen the treaty for debate on April 23 or approve it as it stands.

(Bloomberg)

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