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08 April 2020

FT: Eurogroup fails to land deal on coronavirus economic response

EU ministers to meet again on Thursady (10 April)after they failed to break an impasse between Rome and The Hague over the issue of coronabonds and how to construct loans from the bloc's bailout fund during an all-night teleconference that ended on Wednesday morning.

The meeting came unstuck over two longstanding disputes between the north and south of the eurozone. Roberto Gualtieri, Italian finance minister demanded an explicit reference to the use of “coronabonds” — jointly issued bonds — as part of the bloc's agreement on the way forward. However, northern European countries, led by Dutch finance minister Wopke Hoekstra, are unwilling to commit to common debt issuance and believe the tools already on the table go far enough in addressing the immediate crisis. Italy also pushed during the night for an overhaul of the European Stability Mechanism’s credit lines to remove all conditions on the loans — something its northern partners were unwilling to agree to. After the meeting, Mr Hoekstra said it was “too early to agree a total package”. The Netherlands, he said, was resolutely against the idea of jointly issued debt and would insist on countries making use of ESM money carrying out economic reforms.

FT article (subscription)

© Financial Times

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