In the evening of Thursday, 9 April, EU Finance Ministers reached an agreement in the Eurogroup format, launching a €540 billion package of measures to counter the economic fallout from the coronavirus outbreak. The agreement did not follow the wishes of Italy and a group of other Member States that wanted to institutionalise ‘coronabonds’ – i.e. bonds issued by the European Union, with joint backing. These were particularly controversial in the Netherlands and other Northern European states.
The solution that was found sees most of the funds (€240 billion) funnelled through the existing instrument of the European Stability Mechanism (ESM) as ‘Pandemic Crisis Support’. The rules to obtain funding are relatively loose and only require borrowers to ensure that funds are used exclusively for measures tackling the current crisis. In addition, €100 billion are put in place for the Commission’s unemployment coverage fund SURE. €200 billion are provided to SMEs by the European Investment Bank.
However, the question of how the ESM would be raising money remains open. On 23 April, EU leaders will meet via videoconference to consider the package that the finance ministers agreed on. Provided they sign off on the proposal, the ESM component of the package could be accessible within two weeks.