Economy

EU suspends budget rules to fight Coronavirus

Member states can spend and do whatever it takes to face the Coronavirus Crisis. The European Economy faces the COVID-19 global impact. EU suspends its strict budget rules on public deficits to allow EU Member States to do watever it needs to face the coronavirus pandemic. COVID19 has already killed thousands of Europeans.

EU suspends budget rules for first time

President Ursula von der Leyen said: Today we propose maximum flexibility for our rules which will allow our national governments to support everybody – their healthcare systems, staff as well as the people so severly affected by the crisis.

I want to make sure that we respond to the human as well as socio-economic dimension of the Coronavirus pandemic in the best way possible.
Ursula von der Leyen, President of the European Commission

EU commission tooks this temporary measure and activated the safeguard clause in the European Stability and Growth Pact. This decision will enable governments to “pump as much money as it takes into the system”

The coronavirus pandemic is a major shock for the European and global economies. Member States have already adopted or are adopting budgetary measures to increase the capacity of their health systems and provide relief to those citizens and sectors that are particularly impacted. These measures, together with the fall in economic activity, will contribute to substantially higher budgetary deficits.

Coronavirus Pandemic is a major shock

EU Commission calls on the Council to endorse its proposal as quickly as possible and believes EU finance ministers will approve the clause next week. The Commission stands ready to take further action as the situation evolves.

The European Commission and the Council have already clarified that the coronavirus pandemic qualifies as an “unusual event outside the control of government”. The Commission believes that more far-reaching flexibility under the SGP will protect European citizens and businesses from the consequences of this crisis and to support the economy following the pandemic. Therefore, the Commission decided to propose the activation of the general escape clause of the Stability and Growth Pact.

The proposal represents an important step in fulfilling the Commission’s commitment to use all economic policy tools at its disposal to support Member States’ in protecting their citizens and mitigating the pandemic’s severely negative socio-economic consequences.

750bn ECB bond-buying programme to fight Coronavirus

Also ECB, the European Central Bank announced €750 billion Pandemic Emergency Purchase Programme (PEPP).

This new Pandemic Emergency Purchase Programme (PEPP) will have an overall envelope of €750 billion. Purchases will be conducted until the end of 2020 and will include all the asset categories eligible. PEPP initiative will run under the existing asset purchase programme (APP). ECB will do everything necessary within its mandate.

ECB is fully prepared to provide tools for the Coronavirus crisis

European Central Bank is fully prepared to increase the size of its asset purchase programmes. EU Central Bank will adjust their composition, by as much as necessary and for as long as needed. It will explore all options and all contingencies to support the economy through this shock.

EU Member States have now all the tools at their disposal to make sure the European economy weathers the storm! It is therefore essential that we act decisively and collectively. We need to contain the spread of the virus, help patients and to counter the economic fallout.

EU debates Coronavirus crisis.

EUdebates Team

SHARE your ideas online and JOIN us for a better Europe. eudebates! Your opinion counts! eudebates.tv The unique initiative aiming to promote debate, dialogue, knowledge, participation and communication among citizens.

Recent EU debates

Watch State of the Union live: Ursula von der Leyen gives 2022 address #SOTEU

President Ursula von der Leyen debates priorities ahead of hard winter at the State of the European Union #SOTEU at…

2 years ago

EU steps up solidarity with refugees fleeing Ukraine

More than two million refugees have now been forced to flee their homes in Ukraine to find safety in neighbouring…

3 years ago

REPowerEU to get rid of the dependencies of Russian fossil fuel

The European Commission proposed an outline of a plan to make Europe independent from Russian fossil fuels well before 2030, starting with gas, in…

3 years ago

EU sanctions against Russia following the invasion of Ukraine

In response to Russian President Putin’s unprecedented and unprovoked military attack against Ukraine, the EU is responding by adopting a…

3 years ago

Finland: NATO membership ‘will change’ after Russian invasion

Finish Prime Minister Sanna Marin said Russia’s invasion of Ukraine will change the debate around NATO membership within her country.…

3 years ago

EU responds to Russia’s invasion of Ukraine with massive sanctions

EU leaders held a joint press conference with NATO Secretary-General sending the message that the world can see that unity…

3 years ago

We use cookies to ensure that we give you the best experience on our website.