Europe will need to find another €500 billion to finance the economic recovery from the coronavirus pandemic, the head of the eurozone’s bailout fund said today.
EU finance ministers last week signed off on a €540 billion package of measures aimed at supporting flagging economies — and floated a recovery fund linked to the EU budget.
Klaus Regling, director-general of the European Stability Mechanism (ESM), told Italian newspaper Corriere Della Sera on Sunday the economic recovery from the virus could be “long and costly” and may require new instruments or institutions.
“I would say that for the second phase we need at least another €500 billion from the European institutions, but it could be more,” Regling said.
“For that, we need to discuss new instruments with an open mind, but also use the existing institutions, because it is easier. Including in particular the Commission and the EU budget. Rethinking European funds can go a long way in keeping the European Union together.”
The financial measures agreed last week include €240 billion of credit lines from the ESM, a €200 billion fund at the European Investment Bank and €100 billion for the European Commission’s jobless reinsurance plan.
EU leaders meet on Thursday to discuss the package and debate how to finance the recovery fund — including calls for a form of common debt issuance.
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