Reuters: EU ministers fail to agree virus economic rescue in all-night talks

10:55, 08 April 2020
World
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REUTERS

Diplomatic sources and officials said a feud between Italy and the Netherlands over what conditions should be attached to euro zone credit for governments fighting the pandemic was blocking progress on half a trillion euros worth of aid, Reuters said.

"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."

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The finance ministers, who started talks at 1430 GMT on Tuesday that lasted all night with numerous breaks to allow for bilateral negotiations, 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.

But feuds emerged prominently again, 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'."

An official who participated in the talks said at around 0400 GMT on Wednesday The Hague was the only one refusing to endorse a text that the ministers were expected to agree on to the get endorsement for a new set of economic measures from the bloc's 27 national leaders.

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.

Further proposals under discussions include credit lines from the euro zone bailout fund that would be worth up to 2% of a country's economic output, or 240 billion euros in total. The conditions for gaining access to this money remain a sticking point.

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