Europe, Latest on coronavirus outbreak

EU leaders clash over economic response to COVID-19

- Disagreement remains over idea of issuing common debt despite need for action

Agnes Szucs   | 27.03.2020
EU leaders clash over economic response to COVID-19

BRUSSELS

European Union leaders failed to reach a consensus Thursday on further measures to tackle the economic consequences of the novel coronavirus.   

During a virtual summit, heads of states and governments indicated their support for steps by the European Commission to tackle the socio-economic consequences of the coronavirus crisis but were unable to reach a consensus on issuing common debt in order to bail out economies in need.   

The leaders approved previous proposals on providing medical equipment through joint procurements and common stockpiles and supporting research.   

They also endorsed a decision by European affairs ministers on opening accession talks with Albania and North Macedonia. 

European Council President Charles Michel called the six-hour discussion “an intense political exchange” which was also “a useful and necessary debate.”   

Nine EU leaders called for issuing eurobonds to address the economic consequences of the coronavirus in a joint letter Wednesday.

The leaders of France, Italy and Spain -- three of the four biggest EU economies -- were among the signatories.

The idea has led to intense clashes between EU states because many of them, including Germany, the Netherlands and Austria, are traditionally against mutualizing debt and taking responsibility for countries with lower budgetary discipline standards.

The leaders ended up giving a two-week deadline to the Eurogroup for presenting its proposals on further actions to prevent serious economic fallout.

In the meantime, the European Parliament gave the green light to the European Commission’s Coronavirus Response Investment Initiative. The program will redirect 37 billion euros ($40.8 billion) from unused cohesion funds to support healthcare and suffering European businesses.

EU lawmakers also approved a proposal on saving airport slots for airlines that needed to suspend their services due to the coronavirus in order to prevent them from operating empty flights.

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