We need your help now
Support from readers like you keeps The Journal open.
You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.
If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.
Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
By continuing, you are indicating that you accept our Terms of Service and Privacy Policy.
THE EU HAS offered member states “maximum flexibility” to boost spending and subsidies beyond normal rules to help fight the Covid-19 coronavirus.
“The shock is temporary, but we must work together to ensure that it is as short, and as limited as possible,” EU Commission chief Ursula von der Leyen said.
“Therefore member states should be encouraged and they should feel comfortable to take all the necessary measures to support the most effective sectors.”
The outbreak that began in China has now spread across the globe, with Italy — the bloc’s third biggest economy — one of the worst hit countries.
The European Commission, the EU’s executive arm, has limited firepower to fight an economic downturn, with loosening public spending rules its most powerful tool.
“What we need now is to use flexibility within EU fiscal rules to allow member states to fully respond to the crisis,” said EU executive vice president Valdis Dombrovskis.
The message was meant for heavily-indebted Italy, which has announced €25 billion in emergency spending, technically violating EU debt and deficit rules.
Speaking about Italy in particular, von der Leyen told reporters: “We are absolutely ready to help Italy with whatever is necessary. This is of the utmost importance. This country is severely hit by coronavirus.”
“So whatever is necessary, we support. Whatever they will need, we will answer.”
Von der Leyen also boosted the amount of existing EU budget money to be devoted to the crisis to €37 billion.
The spending in question will come from EU subsidies left unspent and rules will be loosened to keep funds flowing.
All eyes are on a meeting on Monday of EU finance ministers who between them have more power to build a response sizeable enough to be felt on the markets.
The situation was made more urgent after Christine Lagarde, the European Central Bank chief, spooked markets by saying that managing Italy’s public borrowing capacity was not a priority.
To embed this post, copy the code below on your site
have your say