BRUSSELS – EU finance ministers suspended talks on a response to the economic crisis on Wednesday morning, highlighting deep differences within the bloc over how to share the rising costs of the health crisis.
After 16 hours of talks that took place overnight, Mario Centeno, president of the Eurogroup of Ministers of Finance, said negotiations will resume on Thursday.
EU leaders last month gave finance ministers two weeks to agree on a package of measures. This calendar expires Thursday.
The ministers had hoped to agree on a package that could have provided half a trillion euros in economic support.
This would have involved providing businesses with additional liquidity, helping governments in the region to finance employment programs and providing lines of credit with relatively few chains attached to European governments that have difficulty accessing financial markets. .
However, the ministers were deadlocked on two main issues, according to those involved in the talks.
Italy has asked its counterparts to directly commit to the bloc’s plans to issue joint eurozone debt as part of the crisis response and recovery, a measure to which the Down, Germany and others have long resisted.
In the global South, there is concern that without common debt issuance, some of the more fragile economies in the bloc will sink further into debt, which could risk entrenching a two-tier economy in the euro area.
These countries also opposed the conditions that would be attached to the lines of credit for the region’s rescue funds, the European Stability Mechanism. The Netherlands is among those who insist that ESM support is linked to certain promises of economic reform in the medium term.
German Finance Minister Olaf Scholz on Wednesday urged Europe to stand together.
“I therefore call on all euro area countries not to refuse to resolve these difficult financial problems and to facilitate a good compromise,” he said.
However, a diplomat from one of the EU countries supporting the joint debt issue had a more difficult position.
“While we have hundreds and thousands of deaths, finance ministers are playing on words and adjectives,” said the diplomat. “We will be judged severely first by the markets, then by our people and then by other countries who will see us unable to overcome our differences of opinion.”
Write to Laurence Norman at [email protected]