Ministers deadlock

European Union finance ministers deadlock on coronavirus economic strategy

Northern countries resist calls for ‘corona bonds’ and emergency credit lines.

By BJARKE SMITH-MEYER

Finance ministers fell short of agreement Tuesday night on an EU-wide strategy to fight an economic slump caused by the coronavirus.

Ministers met by videoconference to discuss further EU measures, sought by some governments to reassure investors and others that the bloc would find a common response to the virus shutting down economic activity.

Southern European countries had hoped ministers would agree on new credit lines from the eurozone’s bailout fund or creating special EU “corona bonds” to fund the economic fight. Countries including the Netherlands and Germany resisted the ideas.

“We still need more work, this was the conclusion of this evening,” Mário Centeno of Portugal told reporters after chairing the meeting. “The mandate that we get from [leaders] is absolutely key to the next steps.”

The deadlock will push those questions to leaders of the EU governments, who are planning a summit meeting by videoconference on Thursday.

Compared to the corona bonds idea, many countries preferred the option of opening credit lines from the European Stability Mechanism (ESM), Centeno said — although nothing has been agreed.

ESM chief Klaus Regling said there was support for an idea of credit lines that could support 2 percent of a eurozone country’s economic output and would come with conditions on how governments could use the money.

“But it [would be] up to every member state to decide whether they want to apply for it or not,” he said.