Eurogroup discusses recovery after the crisis pending the EC plan

The ministers of Economy and Finance of the eurozone (Eurogroup), together with those of the rest of the European Union (EU), discussed on Friday the priorities to relaunch the economy after the coronavirus pandemic, waiting for the European Commission ( CE) present its recovery plan on May 27.

"The Eurogroup had already agreed on some of the key features of the recovery fund. It must be temporary, with specific objectives and proportional to the extraordinary costs of this crisis. It must help spread the costs over time and ensure solidarity with the Member States most affected ", declared the president of the Eurogroup, Mário Centeno, at the press conference after the meeting by videoconference.

He added that this Friday there was a debate on "the characteristics, design, size and priorities for recovery."

After several delays, the Commission plans to present its recovery plan on May 27.

That plan prepared by Brussels will contain a proposal for the future long-term budget of the European Union (2021-2027) and one for the creation of a recovery fund.

According to the Commission president, Ursula von der Leyen, announced in the European Parliament on Wednesday, the recovery fund will focus on the countries that most need aid. He also confirmed that part of it will come in the form of non-refundable subsidies, as claimed by Spain or France, which would be combined with loans.


Asked about the possibility that in exchange for aid from the recovery fund it would be necessary to apply structural reforms to the member states, the Commissioner for the Economy, Paolo Gentiloni, denied that such conditionality would be applied.

For his part, the managing director of the European Stability Mechanism (ESM), Klaus Regling, stressed that there is only one European economy and not twenty-seven in the entire EU, so helping the countries most affected by the pandemic "is not solidarity it is in the best interest of all Member States. "

"I think a similar approach will be needed in the recovery phase, the second phase, which will follow the emergency phase and can be much longer, probably two or three years," he said.

He added that the recovery fund and the EU budget will be "essential" in the recovery "because it is difficult to see how non-refundable subsidies can be provided except through the EU budget."


In addition to addressing post-pandemic recovery, ministers reviewed measures they had already agreed to in response to the crisis.

The MEDE governing board, made up of the ministers of Economy and Finance of the 19 countries of the eurozone, gave this Friday the definitive green light to the credit line of up to 240,000 million euros for the pandemic, with which it is already operational .

The States that request it may receive a loan from the MEDE for up to 2% of their GDP (about 24.9 billion euros in the case of Spain) to cover health costs, direct or indirect, linked to the coronavirus crisis, with the only provided that the funds are used for this purpose.

The managing director of the MEDE stressed that if countries use the line of credit for healthcare expenses, they will be able to use their own money to finance "other parts of the growing fiscal deficit."

However, Centeno admitted that no country has yet indicated its intention to borrow from the rescue fund.

The Spanish vice president for economic affairs, Nadia Calviño, linked this Friday the decision on the use of credits for the pandemic of the European Stability Mechanism to allow them to minimize financing costs and stressed that for now Spain is financing itself favorably .

The Government does plan to request help from the European fund SURE against unemployment, which will have up to 100,000 million euros to grant credits to the States to pay for the application of temporary employment regulation files (ERTE).

The ambassadors of the countries of the European Union reached a political agreement on this instrument on Friday, which will be operational when the member states have provided 25,000 million euros in guarantees that will allow the Commission to raise funds on the markets to finance the tool.

In some states, parliaments must give the green light before providing guarantees, so according to Gentiloni SURE it will be operational in summer, "probably in July".

The ministers also reviewed progress made on the European Investment Bank fund, which will hold up to € 200 billion and provide loans to companies.


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