European Union governments and institutions are likely to agree on Thursday on steps that could boost the EU’s fiscal response to the coronavirus pandemic to 3.2 trillion euros, the biggest such package in the world.
Existing measures already in place, excluding the European Central Bank’s own response worth 1.1 trillion euros, already top those in the United States, which had unveiled a total support package of 2.4 trillion euros by March 26, according to Bruegel think-tank calculations.
Below is a list of EU measures compiled on the basis of a draft statement by euro zone finance ministers seen by Reuters on Wednesday:
- 240 billion euros available for standby credit for governments from the European Stability Mechanism (ESM), the euro zone bailout fund (to be agreed on Thursday).
- 200 billion euros in additional European Investment Bank lending to all EU firms, on top of 40 billion euros already agreed, with a special focus on small and medium sized companies (to be agreed on Thursday).
- 2.22 trillion euros in liquidity support for EU governments for sectors facing disruption and companies facing liquidity shortages, consisting of public guarantee schemes and deferred tax payments (16% of EU GDP) (already in place).
- 417 billion euros in discretionary fiscal measures of EU governments (3% of EU GDP) (already in place).
- 37 billion euros from the Coronavirus Response Investment Initiative financed by the EU budget (already agreed).
- 100 billion euros in European Commission borrowing against EU government guarantees to subsidise wages in a short-time work scheme aimed at incentivising the reduction of working hours rather than job cuts (to be agreed on Thursday).
- 800 million euros in support from the EU’s Solidarity Fund (in place).
- 2.7 billion in EU emergency support for medical equipment (in place).
EU finance ministers are also planning on setting up a Recovery Fund that would help finance the bloc’s rebound from the deep recession expected in 2020.
The recovery fund’s size and source of financing have not yet been decided, but some proposals put it at around 3% of EU GDP or 420 billion euros and some point to European Commission borrowing against the security of the EU long-term budget as a way to fund it. The money would come on top of the 3.2 trillion total after including decisions on Thursday.