European Union finance ministers have called for a swift agreement to finalise a €750 billion European Union stimulus package to allow for funds to flow as quickly as possible to member states, as a dramatic resurgence of the Covid-19 pandemic threatens EU economies.
"Governments across Europe face serious challenges on the health and economic front," said Minister for Finance and Eurogroup president Paschal Donohoe, after he chaired a video meeting of the 19 euro zone finance ministers on the economic fallout of a new wave of infections.
“Across Europe, new containment measures are being taken. These are difficult times, especially for all those who fall ill, for their loved ones, and for the dedicated professionals who are caring for them.”
A range of EU financial support instruments agreed earlier this year would provide "safety nets" for economies, Mr Donohoe said, adding that resolution was needed between member states and the European Parliament to finalise a landmark recovery plan involving jointly guaranteed borrowing.
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The €750 billion package has been held up by disagreements over how to ensure the money does not fund corruption or go to states that breach the rule of law. The European Parliament has also requested additional spending pledges in the joint EU budget on a number of programmes as the price of its approval.
French finance minister Bruno Le Maire said the "urgency is absolute" to settle the issue, as French authorities reported 36,330 new infections and 854 deaths within 24 hours.
“We cannot afford to delay the disbursement of European funds, which our economies will need to get back on track,” Mr Le Maire said.
Stark outlook
A briefing to the finance ministers by the European Centre for Disease Prevention and Control revealed a stark outlook.
"Unfortunately we have seen a dramatic worsening of the pandemic," said the EU economy commissioner Paolo Gentiloni. "All indicators are going in the wrong direction. The percentage of tests that are positive, the proportion of elderly cases, the increasing number of hospitalisations. Deaths up by 50 per cent in a week. The numbers in terms of new cases and hospitalisation are in many countries worse than in the first wave. Pressure on hospitals is becoming very acute in many parts of Europe."
The commission has loosened the EU’s usual borrowing and spending rules to allow member states to support their economies through the crisis, through the triggering of the so-called general escape clause, a measure expected to be extended throughout next year.
Mr Gentiloni urged member states to “use it”. He added that greater familiarity with remote working could help lessen the economic impact of this wave of infection compared with the first, but that “it is mostly the services sector, particularly tourism, hospitality, entertainment and culture, that are going to be hardest hit in the second wave”.
