Eurogroup position on the features of the projected Pandemic Crisis Support
Following its videoconference of last Friday 8 May on the comprehensive economic response to the COVID-19 pandemic, the Eurogroup issued a statement on the features and standardised terms of the Pandemic Crisis Support (PCS). This is a projected credit line for Member States to be provided by the European Stability Mechanism (ESM) to support domestic financing of direct and indirect healthcare, cure and prevention-related costs due to the COVID-19 crisis.
The Eurogroup agreed that the PCS must be available to all euro area Member States for amounts of 2% of the respective Member’s GDP as of end-2019, and endorsed the institutions’ finding that all ESM Members meet the eligibility requirements to receive support under the PSC. In this regard, it called on the ESM Board of Governors to adopt a resolution confirming this before the 1st of June 2020, following the provisions of the ESM Treaty.
The Eurogroup announced that the only requirement to access the credit line will be that the Member States commit to use it for the Programme’s purposes, a commitment that will be detailed in the corresponding individual Pandemic Response Plans. It also endorsed the ESM proposal on the common financial terms and conditions applicable to any facility granted under the PCS, which includes a maximum average maturity of 10 years for the loans and favourable pricing modalities adapted to the exceptional nature of the coronavirus crisis.
According to the Eurogroup, following a request the PCS institutions are expected to confirm the assessments at the shortest possible notice, and prepare, together with the authorities, the individual Pandemic Response Plan, based on the agreed template. Subject to the completion of national procedures in respect of each request, the ESM governing bodies will approve the individual Pandemic Response Plans, individual decisions to grant financial assistance and the financial assistance facility agreements, in accordance with Article 13 of the ESM Treaty.
Requests for PCS may be made until 31 December 2022, a deadline which may be adjusted by mutual agreement by the ESM Board of Governors upon a proposal by the ESM Managing Director. The initial availability period for each facility granted under the Pandemic Crisis Support will be 12 months, which could be extended twice for 6 months, in accordance with the standard ESM framework for precautionary instruments.
The Eurogroup welcomed the Commission’s intention to apply a streamlined reporting and monitoring framework, limited to the commitments detailed in the Pandemic Response Plan. It noted that the ESM will also implement its Early Warning System to ensure timely repayment of the PCS.
The Statement is available here.