Eurozone finance ministers failed to agree on any common or coordinated fiscal action to the crisis created by coronavirus pandemic. But they met only to promise a strong economic policy response to the alarming situation.
Statement by Eurogroup of ministers
After a length discussion in a conference hall, the group said that it welcomed the measures already taken by other European institutions mainly the European Central Bank, the European Commission and individual states. But the group remained silent on their plan, if the crisis over the European economy deepens.
Paolo Gentiloni, the European Commissioner in charge of economic matters, indirectly accepted the failure of the meeting by saying that the meeting set the right tone for a coordinated policy response by the institutions and member states.
Eurozone bailout fund role in economic crisis
The ministers have different views on the role that the European Stability Mechanism (ESM)can play in the event of the financial crisis shaking the monetary union to its core. The members countries weren’t unanimous on the rules that will govern its actions.
The ESM is governed by its founding members and it frames its conditions for taking action when a country asks for aid. Klaus Regling, the head of ESM, said that the institution was sitting on around €410 billion of unused lending capacity and it is about 4% if the eurozone’s GDP.
Investors and general public in Europe were expecting a more massive fiscal response to the crisis but they were disappointed by the eurozone’s inability to arrive at a significant decision.