August 4, 2020

Coronavirus: Marathon talks over EU virus rescue package stall

EU talks on how to help southern Eurozone countries badly affected by the coronavirus epidemic have stalled after 16 hours.

The European Central Bank says the bloc may need up to €1.5tn ($1.6 trillion; £1.3tn) to tackle the crisis.

European finance ministers were close to a deal, but the talks broke down amid a dispute between Italy and the Netherlands over how to apply the recovery fund.

Negotiations will resume on Thursday.

The coronavirus pandemic has exposed deep divides in Europe, where Italy and Spain have accused northern nations – led by Germany and the Netherlands – of not doing enough.

The row comes as the EU’s top scientist, Mauro Ferrari, resigned citing Brussels’ “disappointing” response to the pandemic.

The Italian, who was head of the European Research Council for less than four months, said in his resignation statement that a special programme he tried to set up to combat the virus had been rejected out of hand.

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The European Commission has not commented on the criticism, but a leading MEP, Christian Ehler, accused Mr Ferrari of conducting a “window-dressing public relations stand on the coronavirus crisis”.

Why did the EU talks break down?
Italy, Spain, France and some other EU states want to share out coronavirus-incurred debt in the form of “coronabonds” (or eurobonds) – mutualised debt that all EU nations help to pay off.

An all-night teleconference between Eurozone finance ministers to discuss this started on Tuesday and went on for 16 hours, but Italy refused to back down on its demands.

The Netherlands opposes the proposal, and wants member states to have repayment conditions phased in over the years.

For now, a draft text of what has been agreed states that “innovative financial agreements” will need to be used.

The meeting’s chairman, Portuguese Finance Minister Mario Centeno, said he had suspended the talks until Thursday but was still seeking a strong safety net against the effects of the virus.

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