Posted on Apr 08, 2020
EU finance ministers failed to reach an agreement after all-night talks, which saw participants dozing off in the small hours, on more support for their coronavirus-hit economies.
Diplomatic sources and officials are reported by Reuters as saying that a feud between Italy and the Netherlands over what conditions should be attached to eurozone credit for governments fighting the pandemic was blocking progress on half a trillion euros worth of aid. One diplomatic source said: “The Italians want a reference to debt mutualisation as a possible recovery instrument to be analysed more in the future. The Dutch say ‘no’.”
“After 16 hours of discussions we came close to a deal but we are not there yet,” Eurogroup chairman Mario Centeno said. “I suspended the Eurogroup and (we will)continue tomorrow.”
The member state finance ministers are trying to agree a package of measures to help governments, companies and individuals.
They had hoped to agree on a half-trillion-euro programme to cushion the economic slump and finance recovery from the pandemic, and turn a page on divisions that have marred relations as the bloc struggles with the outbreak.
German Finance Minister Olaf Scholz Tweeted: “In this difficult hour Europe must stand together closely. Together with (French finance minister) Bruno Le Maire, I therefore call on all euro countries not to refuse to resolve these difficult financial issues and to facilitate a good compromise - for all citizens.”
Issuing joint debt has been a battle line between economically ailing southern countries like Spain and Italy and the fiscally frugal north, led by Germany and the Netherlands, since the financial and euro zone crises began over a decade ago.
To support economies burdened by coronavirus lockdowns, the EU has already suspended state aid limits and allowed member states to inflate their debt to spend more.
But Spain, France and Italy say that is not enough and have cast the discussion about more support as an existential test of solidarity that could make or break the EU.
Le Maire was quoted as saying at one point during the night, according to one official who participated: “Shame on you, shame on Europe. Stop this clownesque show.”
Follow EU Today on Social media: