Euro sign outside European Central Bank, Frankfurt, Germany
10 April 2020

Eurogroup: a substantial deal reached

The European Union (EU) has successfully agreed on a substantial and coherent package of economic responses to the Covid-19 crisis.

€540bn in funding is to be unlocked with immediate effect. This will be rounded off by an ambitious stimulus fund to support a strong recovery for Europe’s economy.

The deal is grounded in a series of pillars:
  • the European Stability Mechanism may be used by euro area countries to provide credit lines of up to 2% of their GDP (so €240bn) to help finance costs in connection with Covid-19. The only condition for accessing this credit line is to direct expenses towards these targets. There are no macroeconomic criteria;
  • the European Investment Bank is poised to create a €25bn guarantee fund to scale up its support for EU businesses – particularly SMEs – to €200bn;
  • the European Commission has pledged a new instrument ("SURE") to provide Member States with financial assistance in favour of employment, first and foremost short-time work. Loans of up to €100bn in total will be granted on favourable terms to Member States. The Member States have decided to work on setting up a stimulus fund to support the recovery of Europe’s economy. This new instrument, proposed by France, must unlock joint funding for the expenses required to support economic recovery in the European countries that have been hardest-hit by the Covid-19 crisis. The financing arrangements are still being debated, with the possibility, backed by France and a number of other countries, of joint debt issuance. France has suggested that this fund might issue up to 3% of EU GDP of joint debt, which amounts to around €500bn.

With this deal, Europe has shown solidarity and a responsible mindset in its efforts to unite in addressing the economic crisis.

France has played a decisive role at every stage of the negotiations, coming up with innovative proposals commensurate with the scale and gravity of the crisis, maintaining a very high level of ambition and building European consensus.

The outcome is welcome news for French and European citizens alike. It will pave the way for support for our businesses and economies on a massive scale.