Euro countries agree £440 billion coronavirus rescue package

9 April 2020, 23:50

Euro countries have offered the bailout
Euro countries have offered the bailout. Picture: PA

By Maddie Goodfellow

Governments from the 19 countries that use the euro have agreed a package of measures that could provide more than £442 billion for companies, workers and health systems to cushion the economic impact of the coronavirus outbreak.

The deal struck on Thursday did not, however, include more far-reaching co-operation in the form of shared borrowing guaranteed by all member countries.

It leaves the issue open as leaders look forward to a further discussion about a fund to support the economic recovery in the longer term.

Borrowing together to pay for the costs of the crisis was a key demand from Italy, whose already heavy debt load is expected to increase because of the recession caused by the virus outbreak.

But it was rejected by Germany, Austria and the Netherlands.

Mario Centeno, who heads the finance ministers' group from euro countries, called the package of measures agreed upon "totally unprecedented".

He said: "Tonight Europe has shown it can deliver when the will is there."

The ministers agreed that hard-pressed governments such as Spain and Italy could quickly tap the eurozone's bailout fund for up to 240 billion euros (£210 billion), with the condition that the money is spent on their health care systems and the credit line expires after the outbreak is over.

Countries such as Spain and Italy have been the worst hit
Countries such as Spain and Italy have been the worst hit. Picture: PA

The agreement also provides for up to 200 billion euros (£175 billion) in credit guarantees through the European Investment Bank to keep companies afloat and 100 billion euros (£88 billion) to make up lost wages for workers put on shorter hours.

Mr Centeno said that countries would work on a recovery fund for the longer term and as part of that would discuss "innovative financial instruments, consistent with EU treaties".

He said that some countries support shared borrowing and that others oppose it.

The deal overcame bitter disagreement between Italy and the Netherlands over the conditions for loans from the bailout fund, the European Stability Mechanism.

Italy had rejected the idea of using the fund because the money comes with tough conditions that recalled the austerity imposed on Greece, Ireland and other indebted eurozone countries that were bailed out during the eurozone debt crisis in 2010-2015.

The compromise struck in the final statement says that countries could borrow up to 2% of annual economic output at favourable rates to finance "direct or indirect" costs of the current health crisis.

The question now is whether the package will be seen as big enough to impress markets and prevent new accumulations of government debt from triggering a new eurozone financial crisis.

For now, bond-market borrowing costs of indebted countries such as Italy are being held in check by the European Central Bank, which has launched an 870 trillion-euro bond purchase programme.

But that programme is so far limited in size or duration.

Latest World News

See more Latest World News

Capitol Riot White Supremacist

Ex-police officer gets seven years in prison over Washington Capitol riot

Breonna Taylor Federal Charge

Justice Department seeks to unseal search warrant of Trump home

A woman was impaled by a beach umbrella at Garden City beach

Woman, 63, dies after being impaled by beach umbrella in US

Denmark Russia Ukraine War

Western nations pledge more financial support for Ukraine

Aerial view of Garden City Beach in South Carolina with Murrells Inlet in background.

Umbrella swept by wind kills woman at South Carolina beach


Hostage stand-off at Beirut bank ends with gunman’s arrest

34 people were hurt in the crash

34 injured as two rollercoaster trains crash at Legoland in Germany

Germany Roller Coaster Accident

Rollercoaster crash at German amusement park injures 34

Mohammad Arada looks at the rubble of his family house after it was destroyed by an Israeli airstrike, in Rafah refugee camp, southern Gaza Strip

Death toll from weekend Israel-Gaza fighting rises to 48

Lativa – Riga – Parliament

Latvian Parliament calls Russia a state sponsor of terrorism


Armed man demanding savings holds Beirut bank staff hostage

McDonald’s restaurant on Postal Square in Kiev. The world’s largest fast food hamburger chain. Ukraine, Kiev – September 5, 2020

McDonald’s to reopen some restaurants in Ukraine

Migration Europe

40 migrants rescued as boat sinks during rescue

Germany Politics

Scholz confident Germany can weather energy crisis this winter

Investigation of new Sars-Cov-2 variant in India called B.1.617 in laboratory, strains from Kerala , Delhi and Maharastra, conceptual image.

Mask mandate returns in New Delhi as Covid cases rise

The 'lowest ever landing' Astonishing footage show's plane landing at Greek island airport.

Heart-stopping moment plane brushes over beachgoers heads in 'lowest ever landing' at island airport