The financial crisis management tool of the eurozone countries must be activated without delay and without conditions, said French Economy Minister Bruno Le Maire before the Eurogroup meeting on Tuesday (24 March). EURACTIV France reports.
“It is a matter of days,” said Le Maire, adding that the re-activation of the European Stability Mechanism (ESM) must not wait any longer. “When an instrument has been provided for the crisis, it seems wise to me to use it unconditionally. The European response must be as proactive as possible”, he added.
France welcomed the move by European Commission President Ursula von der Leyen to suspend the EU’s rules on budget deficits in the Stability and Growth Pact in order to allow governments to support their economies during the COVID-19 crisis.
The suspension of the European budgetary pact was also followed by an amendment to EU rules on state aid announced by EU Commission VP for Digital Issues, Margrethe Vestager. This should enable France to help some of its major companies, led by Air France-KLM, without getting out of line with European law.
Le Maire also welcomed the announcement by the European Central Bank (ECB) of a public and private debt buyback plan worth €750 billion, describing it as “a good decision taken at the right time”.
New European measures
While this series of European measures were welcomed by Le Maire, he insisted that “much more needs to be done”.
According to the economy ministry, industrial activity in France is only around 25%, with significant disparities between sectors, some of which, such as the automotive industry, are experiencing a drop in turnover of 80 to 85%. “This crisis may have a lasting impact comparable to the great recession of 1929,” the minister said.
The ESM, which should provide financial assistance to eurozone countries to maintain financial stability in times of crisis, was set up during the eurozone debt crisis
“We would like to be able to use a line from the European Stability Mechanism”, said Le Maire.
Italy also called for the activation of the ESM as soon as possible and without any limiting conditions. However, Germany, the ESM’s main contributor, announced a few days ago that the mechanism’s activation was not yet on the agenda.
The European economy and finance ministers are due to meet on Tuesday (24 March) by video conference to discuss the activation of the system. “We had long discussions yesterday, we will have long discussions today, no doubt throughout the night on this subject,” acknowledged the French minister.
(Edited by Benjamin Fox)