Finance Minister Edward Scicluna highlighted the need to adopt a flexible approach to how the proposed measures are to apply to member states to reflect their respective realities during a teleconference meeting with his European counterparts.
On Monday, the finance ministers of the European Union held a teleconference during which Minister Scicluna welcomed the proposed financial packages prepared by the European Commission, the European Central Bank and the European Investment Bank. He also welcomed the easing of the Stability and Growth Pact conditions and State Aid regulations.
Addressing the ECOFIN meeting, Scicluna requested the Commission to prepare a recovery plan for member states to provide the needed stimulus to economic growth once this period is over. He explained that this would be apart from giving the necessary regulatory flexibility to the banks to be able to advance bridge loans and give moratoria on existing loans.
The novel coronavirus is spreading through Europe. Apart from the health risk, it is also forcing businesses, as well as EU institutions, to cancel travel and public events and switch to teleworking, in the hope of slowing the epidemic. Italy is the hardest hit country outside of China where the virus originated. Apart from sparking a public health crisis, the outbreak is having a negative impact on the economy of the member states.
During the meeting the finance ministers discussed the economic impact and the measures being taken to alleviate the effects of this virus, including the proposed measures submitted to the Commission and programmes launched by the European Central Bank.
The ministers agreed with the Commission’s assessment that the conditions for the use of the general escape clause of the Stability and Growth Pact would be met. The use of this clause will ensure the flexibility needed to take all measures for supporting our health and civil protection systems, as well as to protect economies. This includes further stimulus and coordinated action, suitably prepared by member states.
Ministers also discussed the impact of the coronavirus on the European Semester 2020 and the fact that the current uncertainty limits the capacity to provide fiscal credibility and economic projections.
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