Daily Management Review

No Agreement Among EU Ministers For Economic Package Over Virus Pandemic


No Agreement Among EU Ministers For Economic Package Over Virus Pandemic
Despite debating throughout the night, finance ministers of the European Union members did not manage to come to an agreement on an economic support package for economies in the EU that have been hit hard by the coronavirus pandemic. The ministers are slated to meet again soon and try and arrive at a decision,
Progress on the agreement for a possible package worth half a trillion euros were blocked because of stark differences between Italy and Netherlands who disagreed on the conditions that  should be imposed to euro zone credit for governments fighting the pandemic, said reports quoting officials.
“After 16 hours of discussions we came close to a deal but we are not there yet,” Eurogroup chairman Mario Centeno said. “I suspended the Eurogroup and (we will) continue tomorrow.”
The consultations were related to measures that can be extended to help governments, companies and individuals hit hard by the coronavirus pandemic.
The package is aimed at providing a cushion against the economic slump that the pandemic is expected to cause and to show solidarity among European Union countries in the crisis.
But in reference to the entangled talks, the French Finance Minister Bruno Le Maire was quoted in the media as saying at one point during the night: “Shame on you, shame on Europe. Stop this clownish show.”
“We call on all European states to be up to the challenge posed by these exceptional times so that we can arrive at reaching an ambitious agreement,” Maire said in in a coordinated Twitter message with German Finance Minister Olaf Scholz, officially. 
Netherlands insisted that the conditions that at a later stage, country-specific economic criteria should accompany the credit from the euro zone for governments, said reports quoting officials of the EU.
Italy on the other hand, while agreeing to concede to a generic reference about the need to stick to EU budget rules, did not want to agree to anything that is country specific. According to reports quoting officials, many agreed that given the uncertainty of the impact of the coronavirus pandemic on economies, it was almost impossible to design any criteria specific for certain countries and governments.
“This is largely about language,” one official present at the talks told was quoted in the media as saying. “There is a broad understanding that in the short run conditionality should focus on health, and in the long run on the effort to return to a stable position. This is broadly understood, but the language proved to be extremely difficult to agree,” said the official.
The credit lines from the euro zone’s European Stability Mechanism (ESM) bailout fund could provide cash of up to 2% of a country’s GDP or 240 billion euros in total for the euro zone.
However, ministers separately agreed that a recovery fund to help the euro zone economy rebound from the recession would be needed for the EU. According to reports, the pandemic is expected to shrink output of the German economy by 9.8 per cent in the second quarter.