Global Economy

Italy PM sees EU's very future at stake over its response to coronavirus

Italian Prime Minister Giuseppe Conte said the very future of the European Union was at stake over its response to the coronavirus as Germany expressed hope EU finance ministers would agree on a 500 billion euro economic rescue package on Thursday. In a 16-hour videoconference that stretched through the night from Tuesday afternoon, the ministers failed to seal a deal on how far to go to support their stricken economies.

“We need an economic and social response at the European level,” Conte told the BBC. “It’s a big challenge to the existence of Europe. “If Europe fails to come up with a monetary and financial policy adequate for the biggest challenge since World War Two, not only Italians but European citizens will be deeply disappointed.” Conte went on to say the European Union’s very future was at stake.

“If we do not seize the opportunity to put new life into the European project, the risk of failure is real,” Conte said. The ministers are due to reconvene at 1500 GMT on Thursday to try to agree on the package that includes precautionary credit lines from the euro zone’s ESM bailout fund, more lending for companies via the European Investment Bank and funding to help companies maintain liquidity during an economic slump by reducing work hours, rather than cutting jobs altogether.

Divisions have so far prevented a deal between southern EU states, led by Italy, who demand far-reaching measures like issuing joint debt, and the Netherlands, acting as the bulwark of the fiscally conservative north, which is calling for more restraint and narrowly focused measures. On the European Stability Mechanism, the two clashed over conditions for accessing the money, a key element to be ironed out if there is to be a deal.

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