EU ministers agree to €500 billion rescue plan for COVID-19 economic fallout

European Union Finance Ministers agreed on 500 billion euros worth of support for a coordinated response to the economic fallout of the COVID-19 pandemic. Eurogroup President Mário Centeno said in a statement that member states involved in the meeting agreed upon three safety nets and a plan for the recovery to grow together.

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However, the deal has not mentioned the use of joint debt to finance recovery which the Italy, Spain and France, worst-hit European nations by the pandemic, have been pushing for. While the group agreed to work on a Recovery Fund to prepare and support the recovery, it deferred the use of “innovative financial instruments” to the national leaders of the bloc.

French Finance Minister Bruno Le Maire welcomed the agreement saying Europe has shown it can rise to the occasion in a crisis situation. German Finance Ministry said that the Eurogroup agreement came up with three answers which include a credit line for countries in need of support, protection of workers through a tool to finance short-time work.

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Divided bloc

EU member states have struggled for weeks to show unanimity over the financial requirements, trade talks, and border restrictions as the pandemic got a strong grip over the region. The group has now agreed for a dedicated COVID-19 instrument to support the financing of emergency aid. It called on member states to explore ways to further reinforce the Emergency Support Instrument in the context of the legislative process.

“Today, we also had a first discussion on a proposal for a temporary recovery fund, which would turbo-charge the European investments that we will need to build a better, greener, more resilient and more digital economy,” said Centeno.

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