The European Union is expected to formally announce on March 13 measures that would allow its member nations to effectively tackle the coronavirus crisis. According to reports, the move would green-light the deficit spending that has already been announced by Italy, the European country that has been worst hit by the coronavirus.
As per reports, the move may also provide a coordinated fiscal boost at EU level because it will provide states that are usually unwilling to spend, like Germany, a reason to unlock financial resources. According to reports, Commission President Ursula von der Leyen and the vice-president for economic affairs, Valdis Dombrovskis will be present for a press conference at 1 p.m. (1200 GMT) where they will announce the eagerly awaited measures.
As per reports, von der Leyen on March 10 already announced some of the key proposals which will include the use of existing EU funds to extend helping hand sectors that were struggling to cope up with the virus. It is also believed that von der Leyen will announce cheap loans for firms that are at risk of going bankrupt due to the coronavirus outbreak.
According to reports, the rules of the European Union state that the member states are required to keep their budget deficit below 3 per cent of Gross Domestic Product (DP) and the members that have a debt exceeding 60 per cent will have to take steps to reduce it.
The European Union rules already allow for extra spending during circumstances of emergency. Reportedly Commission President Ursula von der Leyen and the vice-president for economic affairs, Valdis Dombrovskiswill just restate these principles during the news conference. During the 2008/09 financial crisis, a similar softening of rule allowed member states to spend hundreds of billions of euros to bail out banks and revive the economy.