Eurogroup backs emergency credit lines but not corona bonds.
EU finance ministers agreed on a compromise strategy today to fight the coronavirus economic fallout with emergency situation credit lines and spending plans– however no corona bonds.Ministers quickly validated a deal that France, Germany, Italy, the Netherlands and Spain had put together in private talks prior to the online Eurogroup conference officially began at 9:30 p.m. Brussels time, more than four hours late.Advertisement The text of
the accord allows the
European Investment Bank to establish a fund to back as much as EUR200 billion of loans to cash-strapped companies across the bloc.Any eurozone nation will have the ability to make use of a credit line worth 2 percent of its annual financial output from the club’s bailout arm, as long as the money is used for health-care costs. The credit lines will only be offered to handle the crisis and should be readily available within 2 weeks.No other conditions use. But the deal still calls on recipients to
remain committed to keeping their financial resources in check after the coronavirus crisis is over.The settlements also backed the European Commission’s EUR100 billion jobless reinsurance plan.
The initiative will be short-lived and focused on securing employees, while also aiding with some medical costs.Ministers stopped short of sanctioning corona bonds. They will instead”deal with “constructing a temporary”recovery fund”that might
supply cash to countries through the EU budget to help an economic recovery. However the ministers left it to federal government leaders to determine how the fund will raise money. Source