PARIS (Reuters) – European finance ministers have agreed on an economic recovery plan after the crisis opening the door to jointly issued debt, French Finance Minister said Thursday, welcoming what he called a French success .
Bruno Le Maire said after talks with his counterparts in the euro area that the member states of the European Union had agreed to mobilize 1 trillion euros to support the economy in response to the coronavirus crisis, as part of the most important economic plan in EU history.
The Mayor said in a call to journalists that the European Stability Mechanism will be activated with a slight conditionality, which could help a country like Italy which is facing high borrowing costs.
He also said the deal will immediately make € 500 billion available and that a stimulus fund worth around € 500 billion would follow, which would be financed by debt.
“Who will increase the debt? Much uncertainty remains to be determined. But I have a firm belief that the fund will emerge and that debts will be raised jointly in a form that remains to be determined, “said Le Maire.
He added that the reference to the 15-hour negotiating document on innovative financial instruments opened the door for the first time to jointly issued debt.
“It means what it means.” The only instrument that does not yet exist in European funding is joint debt, “said Le Maire.
Germany and France overcame Dutch opposition to the crisis plan during the marathon talks, but only by avoiding an explicit mention of the debt issued jointly in the final agreement.
Report by Leigh Thomas and Gwenaelle Barzic; Editing by Daniel Wallis
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