PARIS (Reuters) – The European Union should mobilize all of its existing crisis measures in response to the coronavirus epidemic and propose new joint mechanisms to finance the recovery, the French finance minister said Thursday.
Bruno Le Maire said that the European Stability Mechanism, the rescue fund with 400 billion euros (436.8 billion dollars) in firepower, should be made available as a source of funding for countries with only minimal conditions and without stigmatization to use it.
He said new funding of up to € 200 billion should also be made available by the European Investment Bank and supported a European Commission proposal for a total unemployment unemployment reinsurance scheme of 100 billion euros.
“These three instruments could be our common European framework for immediately tackling the economic crisis,” Le Maire said during an online press conference.
“In addition to the framework, the EU should think about long-term instruments that would be useful for reviving the economy after the crisis. “
Last week, EU leaders gave finance ministers until April 9 to find ideas on how to finance the recovery after Germany and the Netherlands canceled a call from France, from Italy, Spain and six other countries for a common debt instrument issued by a European institution.
The Mayor launched the idea of a temporary common fund aimed solely at financing and coordinating economic recovery after the health crisis.
Concentrating the fund on one goal and limiting its lifespan to five to ten years could help overcome the traditional tax-conservative opposition of Germany and the Netherlands to the common debt.
The fund would be funded by issuing bonds backed by all EU member states and managed by the European Commission, said Le Maire, refusing to say how big the fund should be.
Countries could draw on the fund based on the economic damage they suffered during the epidemic and would be excluded from the long-term budget of the European Union.
(Report by Leigh Thomas; Edited by Alison Williams)