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Daniel Sarmiento
16th March 2020
Banking & Finance Competition & State Aid Covid-19 Institutional law Internal Market

Eurogroup launches economic policy response to COVID-19 outbreak

The Eurogroup issued a statement this evening introducing the economic policy response to the outbreak of COVID-19.

The statement reflects that the fiscal support to the economy “will be very sizeable”. Fiscal measures of about 1% GDP will be introduced for 2020 to support the economy, as well as liquidity facilities of at least 10% GDP, consisting of public guarantee schemes and deferred tax payments.

The statement points out that “these figures could be much larger going forward”.

At the national level, Member States will introduce measures for immediate fiscal spending on containment and treatment of the disease, as well as liquidity support for firms and affected workers.

At the European level, national efforts will be supplemented with the Commission’s EUR 37 billion “Corona Response Investment Initiative”, the EIB’s mobilization of EUR 8 billion of working capital lending for firms and EUR 10 billion in additional investments in SMEs and midcaps.

The statement also highlights that the Stability and Growth Pact has flexibility to cater for the current and future situation, in which automatic stabilisers will “fully play their role” and state aid rules will be implemented with the aim of preserving medium-term sustainability.

The statement concludes reasserting the commitment of the Eurogroup to “take whatever further coordinated and decisive policy action is necessary, including fiscal measures, to support growth and employment”.

Read the full statement here.



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