Negotiations of the eurozone finance ministers on the package of assistance in connection with the Coronavirus pandemic will continue on April 9, the chairman of the Eurogroup said.
Negotiations of the Eurogroup on anti-crisis economic support will continue on April 9. Eurozone finance ministers were unable to agree on the amount of aid to Italy. This was reported by chairman of the Eurogroup Mariu Sentenu on Wednesday, April 8.
“After 16 hours of discussions, we came close to an agreement, but have not yet reached it,” wrote Portuguese Finance Minister Senteno. According to him, it’s about solving two problems. First, the European Union has created a strong financial security network against the backdrop of the coronavirus pandemic – “to protect workers, firms and countries. Secondly, participants in the euro zone need to develop a “solid plan for the recovery” of national economies.
Disagreement between the Netherlands and Italy
According to Reuters sources, the main stumbling block in the negotiations was the disagreement between Italy and the Netherlands on the terms on which the governments of the euro zone countries will attract loans to combat the epidemic. The disagreement has so far prevented the community from agreeing on a new half a trillion euro assistance package to deal with the new virus pandemic.
The Coronabond dispute
Italian Prime Minister Giuseppe Conte warned at the end of March that the EU would lose its destiny if it fails to develop a serious response to the Coronavirus pandemic and the crisis associated with it. His statement served as a reference to the first ever EU issue of pan-European bonds (“coronabonds”) to attract borrowing to stimulate the economy and support the EU countries most affected by the coronavirus pandemic. Italy and Spain, in particular, insist on issuing them.
The debate has been going on for ten years since the eurozone debt crisis. Even then, it was proposed to issue joint government bonds and direct the money received during their placement to support Greece and other countries on the verge of insolvency. But the idea was rejected and went along the path of providing conditional, targeted multibillion-dollar assistance packages. And in 2012, a permanent stabilization fund, the European Stability Mechanism (ESM), was created in the Eurozone. The principal opponent of joint bonds has always been Germany, strongly supported by Austria, Estonia, Finland and the Netherlands.