EU commission presents Covid-19 economic aid package #Coronavirus

The European Commission is ready to activate a clause in EU fiscal rules that would allow a suspension of budget commitments by countries most affected by the coronavirus crisis, the EU executive’s vice president said on Friday.… #eudebates #coronavirusitalla #Covid_19 #coronavirus #CoronavirusOutbreak #Corona #COVD19 #Health #EUCO #COVID #Valdis #Dombrovskis #ValdisDombrovskis

“We stand ready to activate the general escape clause to accommodate a more general fiscal policy support,” Valdis Dombrovskis, the commissioner in charge of economic affairs, told a news conference.

“This clause would suspend the fiscal adjustment recommended” and can be triggered in case of a severe downturn, Dombrovskis said.

However, that does not entail a full suspension of fiscal rules known as the Stability and Growth Pact. That could limit the speed of spending by EU governments.

“We are not suspending the Stability and Growth Pact. We are using flexibility which is there in the Stability and Growth Pact,” Dombrovskis clarified when asked.

Commission pledges ‘whatever is necessary’ to fight coronavirus. The European Union will establish a 37 billion euro investment initiative as part of a package of measures to cushion the bloc’s economies from the impact of coronavirus.

European Union governments may need to provide state aid on “a much larger scale” due to the coronavirus crisis and the bloc’s executive will put in place procedures to deal with this very quickly, the EU’s anti-trust chief Margrethe Vestager said during a news conference in Brussels.

EU Commissioner Vestager said that the European Commission would put place a compensation scheme for the tourism, hotel and transport sectors and would enable governments to ensure that banks have adequate liquidity.

She said there were many ways that governments could help without needing state aid approval, and gave as examples, providing wage subsidies, or suspending corporate tax payments or value-added tax payments.

Governments can aid companies and temporarily exceed EU deficit limits without fear of punishment from Brussels to combat the economic fallout of coronavirus, the European Commission said Friday.

“We will do whatever is necessary to support the Europeans and the European economy,” President Ursula von der Leyen said today. She said €37 billion from the EU budget would be redirected to help keep countries’ healthcare, companies and households afloat.

Italy, where coronavirus has hit hardest outside of China, will get as much flexibility as it needs under budget rules to stabilize its economy, despite its high public debt of about 132 percent of its economic output.

“Governments may need to give state aid at a much larger scale,” Commission competition czar Margrethe Vestager said at a news conference alongside von der Leyen. “This is the case in Italy. The situation in more and more member states is going in the same direction.”

The antitrust chief also said she would create a specific guide for how countries can use state aid to act quickly.

Eurozone stock prices have rebounded from Thursday’s meltdown.