Malta welcomes agreement on Pandemic Crisis Support

Malta has welcomed the agreement on the establishment of the Pandemic Crisis Support instrument of the European Stability Mechanism (ESM) reached at the Eurogroup videoconference.

In a statement, the Finance Minister Edward Scicluna welcomed the agreement and called for more EU regulatory clarity for banks.

The Finance Ministers of the Euro Area member states held a videoconference on Friday 8 May.

The agreement was reached on the features and standardised terms of the Pandemic Crisis Support to be provided by the European Stability Mechanism (ESM).

All Euro Area member states can make use of this new instrument to support domestic financing of direct and indirect healthcare, cure, and prevention-related costs due to the coronavirus outbreak. Its size will be 2% of individual member state Gross Domestic Product, as a benchmark.

The Eurogroup also agreed with the Commission’s intention to apply a streamlined reporting and monitoring framework, limited to the commitments detailed in the Pandemic Response Plan, as outlined in the letter of 7 May of Executive Vice President Valdis Dombrovskis and Commissioner Paolo Gentiloni.

Minister Scicluna underlined that further clarity from the European Commission would encourage the expansion of more bank lending.

“Among the measures which could be considered is the treatment of public guaranteed loans for non-performing loan purposes and the temporary relaxation of capital requirements regulations which affect the banks’ risk weightings. The government guarantees loans are aimed at safeguarding lending to consumers and businesses,” Scicluna told the Eurogroup during the videoconference.

The ministers will reconvene next week to continue working on measures aimed at assisting the recovery of the European economy.