Printable Page Headline News   Return to Menu - Page 1 2 3 5 6 7 8 13
 
 
EU Leaders Order Virus Recovery Plan   03/27 06:26

   European Union national leaders told the bloc's finance ministers Thursday 
to draw up new measures to tackle the devastating economic impact of the 
coronavirus pandemic after failing to bridge major differences over how best to 
share the debt burden.

   BRUSSELS (AP) -- European Union national leaders told the bloc's finance 
ministers Thursday to draw up new measures to tackle the devastating economic 
impact of the coronavirus pandemic after failing to bridge major differences 
over how best to share the debt burden.

   During six hours of talks by video conference, the leaders also called on 
the EU's powerful executive arm, the European Commission, to draw up a strategy 
for resuscitating their choked economies once lockdowns and other health 
measures are lifted.

   The talks came as the death toll in Europe from COVID-19 soared well beyond 
13,000 people. Spain has just prolonged a state of emergency, while French 
President Emmanuel Macron launched "Operation Resilience," a military-backed 
response to combat the illness.

   "This crisis is exceptional and unique and requires a very strong answer," 
EU Council President Charles Michel told reporters after the summit. Euro zone 
finance ministers will have to continue working and make proposals on tools 
"within two weeks," he said.

   In a joint statement, the leaders said those economic "proposals should take 
into account the unprecedented nature of the COVID-19 shock affecting all our 
countries."

   As the virus has taken hold, the Commission --- the guardian of the EU's 
rule book --- has permitted unprecedented border and economic measures so that 
embattled member countries like Italy and Spain, but also many others, can save 
supply chains and businesses.

   But while the leaders all acknowledge the extent of the crisis and the need 
to support Italy in particular, they are divided over whether to use every 
economic tool at their disposal now or keep something in reserve should a 
second wave of infections start.

   Finance ministers from the 19 countries using the euro currency agreed in 
principle this week to letting partners in distress borrow up to 2% of their 
gross domestic product from the European Stability Mechanism, a bailout fund 
set up during the debt crisis a decade ago with lending assets of 410 billion 
euros ($444 billion).

   A group of nine nations wants the immediate rollout of "coronabonds," shared 
debt backed by all euro zone countries. This would let even those hardest-hit 
borrow at sustainably low interest rates as their spending balloons on 
hospitals and measures to stop businesses going bankrupt.

   That idea is anathema, though, to countries like Germany and the 
Netherlands, which have long objected to common borrowing because of the risk 
it leaves them holding the check for the finances of shakier countries and 
reduces incentives for other countries to control their deficits.

   Looking forward, the leaders demanded an action plan to help their economies 
recover once the crisis is over.

   Europe must "start to prepare the measures necessary to get back to a normal 
functioning of our societies and economies and to sustainable growth," the 
leaders' joint statement said. It underlined that the plan must include "a 
coordinated exit strategy, a comprehensive recovery plan and unprecedented 
investment."

   The coronavirus crisis comes just nine months before the EU's long-term 
budget expires. Talks on the next seven-year spending plan are in a deadlock, 
with a small group of countries, led by the Netherlands, refusing to contribute 
more money to fill a gap left by the departure of Britain.

   European Commission President Ursula von der Leyen said her office and 
agencies stand ready to support the EU's 27 member countries with every tool at 
her disposal.

   "But we must be very clear, we are in the final year of a seven-year budget. 
This crisis shows how important, indeed crucial, it is to have a budget that 
can deal with complex crises such as this one," she told reporters.

   As governments wrestle over shared borrowing, the European Central Bank 
stepped up its efforts to bolster the economy. The central bank dropped a 
longstanding limit on its bond purchase stimulus of no more than a third of a 
country's government bonds. That means its 750 billion-euro pandemic emergency 
purchase program announced last week can target its support toward hard-pressed 
countries such as Italy.


(KR)

 
 
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN