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Eurogroup resumes business marathon. Consensus deadline expires this Thursday

by ace
Eurogroup resumes business marathon. Consensus deadline expires this Thursday

Stephanie Lecocq / EPA

European finance ministers will resume this Thursday the videoconference meeting started on Tuesday and interrupted on Wednesday to try to finally reach a political agreement on the European Union's economic response to the crisis caused by Covid-19.

This Eurogroup meeting, considered decisive and conducted by videoconference from Lisbon by Minister Mário Centeno, started on Tuesday afternoon and was suspended early on Wednesday morning, after 16 hours of discussions without being able to reach a consensus, which is slow to be reached, although policy makers guarantee that there is little left.

“After 16 hours of discussions, we came close to an agreement, but we are still not there. I suspended the Eurogroup and (the discussion) continues tomorrow, Thursday ”, announced after the first round of the negotiating marathon the chairman of the forum of finance ministers of the euro zone and Portuguese finance minister, adding that their objectives remain the same.

Before the meeting, extended to countries that do not have a single currency, Centeno said he expected an agreement on a robust emergency financial package for workers, companies and countries, worth a total of around 500 billion euros, as well as a “commitment course ”in relation to a large-scale recovery plan.

Two of the three elements of the package, the “safety nets” for workers and companies, seem peaceful, given the consensus around the € 100 billion program proposed by the European Commission to finance employment protection schemes and a guarantee of EUR 200 billion from the European Investment Bank to support companies in difficulty, especially small and medium-sized enterprises.

The question that continues to divide member states is how to support states, as countries like Germany and the Netherlands remain unyielding in their opposition to the joint debt issue solution – the coronabonds or eurobonds, defended by Italy, Spain and Portugal , among others -, and even the solution that seems closer to reaping unanimity, the credit lines of the European Stability Mechanism (ESM), continues to provoke divergences, namely on the conditions that will depend on these loans, and finds much resistance by part of Italy.

The finance ministers are then “obliged” to reach a compromise on support for member states, as this was the mission entrusted to them by the EU heads of state and government at the last summit, via videoconference, held on 26 March.

At the end of this European Council, which was also marked by divergences and strong tensions, the leaders asked the Eurogroup to present concrete proposals within two weeks, a term that “expires” precisely this Thursday.

According to Business Journal, if there is no agreement on how to access the ESM, the node may have to be untied by European leaders.

The Eurogroup videoconference will resume this Thursday at 4 pm in Lisbon, 5 pm in Brussels.

Lagarde calls for solidarity

Regarding this Thursday's meeting, the president of the European Central Bank (ECB), Christine Lagarde, asked European states to be “side by side” in responding with budgetary measures to the crisis caused by the covid-19 pandemic at a time where there are disagreements.

“It is vital that the budgetary response to this crisis is strong enough across the euro area. Governments must stand side by side to jointly apply policies appropriate to a common shock for which no one is responsible, ”wrote Lagarde, in an opinion article published by the French newspaper Le Monde and quoted by AFP.

“If some countries do not recover, others will feel the effects of that. Solidarity is in everyone's interest ”, defended Lagarde.

"The total alignment of fiscal and monetary policy policies and equal treatment against the virus are the best way to protect our productive capacity and employment, with a view to returning to sustained growth and inflation rates when the pandemic ends", finished off.

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