Eurozone fails to agree deal on €540bn coronavirus rescue plan
Talks on a coronavirus economic rescue plan for the eurozone worth up to €540bn (£476bn) have broken up without a deal amid north-south divisions over the strings to attach to financial aid for the most-stricken countries.
The coronavirus pandemic is testing EU unity, especially the inner circle of 19 countries that use the single currency, where there are stark differences over the question of shared debt. A dispute between the Netherlands and Italy, the two countries at opposite poles of the EU’s debt divide, thwarted an agreement on a package of loans that could be worth up to €540bn.
The ESM has €410bn of unused lending capacity, which would allow the hardest-hit countries, such as Spain and Italy, to draw on emergency credit lines. About €240bn of this could be made available.Under EU law, any country that takes a loan from the ESM must sign up to terms and conditions but countries are split over what they should be.Italy had wanted a reference to common debt issuance, to make using the EU bailout fund more politically palatable. The Netherlands held out for “growth-infusing” conditions attached to any credit lines from the bailout fund. The Dutch wanted to ensure that ESM credit lines were linked to measures to boost growth and balance budgets once the crisis was over.While there is agreement not to send in EU inspectors to monitor loans, southern European countries, such as Italy and Spain, have complained of being stigmatised for a crisis not of their making.
As countries look to their next move, France revealed it has not ruled out shared debt issuance with a smaller coalition of willing eurozone countries.
https://www.theguardian.com/business/2020/apr/08/eurozone-fails-to-agree-on-540bn-coronavirus-rescue-plan
A "smaller coalition"? how small are we talking here?
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