EMU Archives

European Central Bank governors are expected to refrain from doling out fresh stimulus medicine Thursday, hoping EU leaders will do their bit to shore up the crisis-hit region with a huge coronavirus recovery plan.

Eurozone finance ministers are split on whether to pick their Spanish colleague Nadia Calviño or Ireland’s Paschal Donohoe as the next Eurogroup president during a videoconference on Thursday (9 July), EU sources and diplomats told EURACTIV.com.

Italy, Spain and France will register the worst economic downturn among eurozone countries this year as the contraction will be more severe than previously expected, according to the latest European Commission forecast published on Tuesday (7 July).

The European Fiscal Board on Tuesday (1 July) recommended to get rid of the EU's debt threshold of 60% of GDP and instead adopt realistic debt targets specific to the bloc's national economies.

Ministers Nadia Calviño (Spain), Paschal Donohoe (Ireland) and Pierre Gramegna (Luxembourg) will compete for the Eurogroup Presidency. While Calviño could become the first woman to chair the body, her colleagues promised to become ‘bridge builders’ between the different positions. 

The deadline for eurozone finance ministers to put forward their candidacy to chair the Eurogroup ends on Thursday (25 June), with no official contenders yet, although Spain’s Nadia Calviño, Ireland’s Paschal Donohoe and Luxembourg’s Pierre Gramegna are seen as leading the race.

Eurozone creditors who designed and supervised Greece's bailout paid “insufficient attention” to the Greek social needs, had inadequate strategies and pursued damaging fiscal adjustment in the bailout programmes agreed with Athens, an independent evaluation concluded

Spain’s minister of Economy, Nadia Calviño highlighted her “key role” in preparing the Eurogroup response to the COVID-19 crisis, as the eurozone finance ministers will pick a new president in early July.

As one of the most influential Eurogroup figures during the previous crisis, Thomas Wieser chaired the preparatory meetings of eurozone finance ministers between 2011 and 2018. In an interview with EURACTIV, the American-Austrian economist described the EU’s fiscal rules as “bad practical economics”, in particular for handling a crisis such as the current one.

European Central Bank President Christine Lagarde called on member states on Monday (8 June) to urgently adopt the EU recovery plan, saying any delay could create “negative spillovers” in the markets and increase the costs of overcoming the recession. 

The European Central Bank announced on Thursday (4 June) that it will add €600 billion to its €750 billion bond-buying response against the coronavirus, in its first governing council meeting after Germany’s Constitutional Court ruled against the bank's asset-purchasing programme.

It is increasingly evident that the European Commission has no intention to return to the tight cash-for-reform system to manage the recovery funds and that ‘hawkish’ member states could find it difficult to turn the proposed procedure into a troika-type oversight.

As part of its recovery plan, the European Commission wants to attract €600 billion of additional private investments in order to finance strategic sectors and support viable companies at risk of liquidity shortages in the aftermath of the COVID-19 crisis.

The European Commission will propose later on Wednesday (27 May) an unprecedented fiscal stimulus of €750 billion, mostly made up of grants that do not need to be reimbursed, to overcome the deepest recession in EU history.

The European Commission’s proposal on the next seven-year budget and the accompanying recovery fund will this Wednesday (27 May) launch one of the most difficult negotiations in the EU history, as member states disagree over the size, shape and conditions, and primarily whether to give grants or loans. 

France on Thursday (21 May) called on the EU to suspend its strict budgetary rules for member states for this year and next due to the severe hit economies have taken during the coronavirus pandemic.

The European Commission could start controlling deficit and debt levels from next year, once the recession is over. But the road to balancing public accounts again will avoid the “mistakes” of the last crisis, the institution said on Wednesday (20 May). 

The €240 billion in ‘cheap’ loans for countries affected by the coronavirus COVID-19 will be available as from 15 May, 15 days ahead of the expected date, European Stability Mechanism (ESM) chief, Klaus Regling, said on Friday (8 May).

The European Commission expects the Spanish economy to contract by as much as 9.4% this year due to the impact of the coronavirus, although it should regain some of the lost ground in 2021, when it is expected to grow by 7%, EU sources told EURACTIV.

Germany’s central bank (Bundesbank) should suspend the implementation of the European Central Bank's critical bond-buying programme unless the ECB proves the proportionality of its monetary stimulus, aimed at shoring up the eurozone's economies, Germany's Constitutional Court ruled on Tuesday (5 May).

The ECB is ready to increase its €750 billion bond-buying programme to cope with the fallout of the coronavirus pandemic, as the eurozone economy could fall by 12% this year, its president Christine Lagarde said on Thursday (30 April).

Today, the European Union is being hit by a symmetrical shock caused by COVID-19. This renders the instruments developed to address the 2008 financial crisis as unfit for purpose, write Iratxe García and Paul Tang.

The European Commission is planning to present to EU finance ministers next week its pan-European unemployment reinsurance scheme proposal to support the most affected countries by the coronavirus.

The economic slump caused by the coronavirus COVID-19 is expected to be deeper than the 2009 Great Recession, according to a European Commission document seen by EURACTIV.