The Eurogroup says that the response to Covid must guarantee equality between countries

The president of the Eurogroup, Mário Centeno, defended this Friday that the economic response to the pandemic should be focused on a recovery that guarantees a level playing field between European states, since not everyone has the same margin to face this crisis.

"The recession will be deep and inevitable, but it is in our power to shape the response to the crisis, from emergency to recovery. Not all Member States have the same fire capacity and we have to ensure a level playing field" Centeno said in a video statement ahead of the telematic meeting of eurozone finance and economy ministers.

The Eurogroup will address the macroeconomic forecasts released this week by the Commission, which point to a recession of 7.7% in the single currency area this year and a rebound of 6.3% in 2021, but warn that the recovery will be very uneven between States, with Spain, Italy or France among the most affected.

Its main task, however, will be to agree on all the details of the credit line for the pandemic that will be established by the European Stability Mechanism (ESM), the eurozone rescue fund, which will be able to lend up to 2% of its GDP. to countries that request it to cover direct or indirect healthcare expenses.

Sources from the Spanish Ministry of Economy point out that the pending questions on the line for the pandemic come quite closed to the meeting, with which it is expected that the Eurogroup will close an agreement today so that the board of governors of the MEDE can give its approval next or next week.

The goal is for it to be operational on June 1.

The European Commission confirmed on Thursday that all countries will be able to apply for this loan since their economic situation is fundamentally solid and this Friday it presented its proposal to soften the conditions of the supervision to which the beneficiaries would be subjected.

Ministers should also give more details on the use that could be made of these funds.

The idea is to clarify that not only strictly hospital expenses can be covered, but also indirect costs linked, for example, to confinement measures to curb the pandemic, point from the Ministry of Economy. It would not mean - they point out - that they can be used to cover all the consequences of the crisis.

It is not expected to go into much detail, since each country that requests it will have to send a specific list of the expenses it plans to undertake, but it will establish a framework in which "it is realistic for countries to justify expenses for this concept until 2 % of its GDP ", indicate the same sources.

As for the terms of the credits, it is considered that they have a maturity of ten years and that the costs are somewhat lower than those generally applied by the ESM.

Spain, for its part, has so far rejected the need to apply for this line of credit.

The Vice President for Economic Affairs, Nadia Calviño, stated this week in Congress that in any case "it is important to have alternative sources of financing (...) and that is why it is positive to have these instruments available" so that states can access them that they "consider it interesting", rejecting that it can be assimilated to a rescue.


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