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EU leaders look to life after virus with measures to save economy

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EU leaders are to start laying the groundwork for Europe’s return to normality once the peak of the coronavirus crisis has passed

The leaders during a videoconference on Thursday also promised to focus on the immediate economic challenges of the outbreak.

A document sighted by newsmen revealed that Eurozone governments were at odds over how much fiscal firepower to roll out at present.

According to the document, leaders, however, could signal support for a precautionary credit line from the currency area’s bailout fund for countries struggling to cover emergency spending.

The details, and the crucial conditions attached to access the funds, would however still need to be thrashed out by eurozone finance ministers.

Covid-19, the potentially deadly disease caused by the new coronavirus sweeping the world, has brought social and economic life to its knees across the European Union.

Nationally imposed measures such as border restrictions have also challenged the bloc’s unity.

“While the urgency is presently on fighting the coronavirus pandemic and its immediate consequences.

“We should start to prepare the measures necessary to get back to a normal functioning of our societies and to sustainable growth,’’ EU leaders said, according to a draft text.

The economic impact of the outbreak is particularly worrying; with the European Commission warning that it could trigger a slump comparable to the worst year of the eurozone crisis, in 2009.

The commission and the European Central Bank have introduced a series of measures to soften the blow, and member states have taken far reaching national fiscal steps.

However, many are calling on the eurozone to do more to bolster the 19-member currency area.

Nine member states, including worst hit Italy, penned a letter on Wednesday to European Council President, Charles Michel, calling for further action to buttress their economies today.

Specifically, they were demanding a common debt instrument to raise funds on the market for all on equal terms an idea commonly referred to as `coronabonds’.

“The case for such a common instrument is strong, since we are all facing a symmetric external shock, for which no country bears responsibility, but whose negative consequences are endured by all,’’ the letter says.

Besides Italian Prime Minister Giuseppe Conte, it is signed by the leaders of Belgium, France, Greece, Ireland, Luxembourg, Portugal, Slovenia and Spain.

The ECB’s former president Mario Draghi, who fiercely opposed such a move during the eurocrisis, backed it in an op-ed for the Financial Times ahead of Tuesday’s talks.

“Faced with unforeseen circumstances, a change of mindset is as necessary in this crisis as it would be in times of war,’’ he wrote.

The idea, debated by eurozone finance ministers on Tuesday, is unlikely to fly, however, given the time it would take to set up a new instrument and traditional reluctance from fiscal hawks such as Germany and the Netherlands.

The issue threatens to reopen old fault lines between north and south, reminiscent of the divisions laid bare by the eurozone crisis.

The EU leaders’ videoconference, set to last around two hours, replaces a formal two-day meeting that was supposed to take place in Brussels this week.

In a glimmer of good news, EU leaders are expected to approve the long-awaited start of accession negotiations with membership hopefuls Albania and North Macedonia.

Edited By: Halima Sheji/Isaac Aregbesola
(NAN)

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Sheji Halima

Sheji Halima: NNN is a Nigerian online news portal that publishes breaking news in Nigeria, and across the world. We are honest, fair, accurate, thorough and courageous in gathering, reporting and interpreting news in the best interest of the public, because truth is the cornerstone of journalism and we strive diligently to ascertain the truth in every news report. Contact: editor @ nnn.ng. Disclaimer.

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