Mario Centeno, Portugal’s finance minister and head of the group of euro-area finance ministers, listens during a press conference following a Eurogroup meeting in Brussels, Belgium, on Monday, Jan. 22, 2018.
Euro zone finance ministers failed to reach an agreement Wednesday on how to provide additional stimulus to weather the economic impact of the coronavirus pandemic.
The COVID-19 virus, which emerged in China in late 2019, has brought the major European economies to a halt. Businesses activity has been put on hold across the region and that’s pressured governments to take bold action to support companies and citizens.
However, after 16 hours of talks, the finance ministers remain divided over how best to provide loans and whether to go as far as issuing joint EU debt.
“We came close to a deal but we are not there yet,” Mario Centeno, who chairs the meetings among the 19 ministers, said on Twitter.
The group had been working on a new credit line to be provided by the European Stability Mechanism — an emergency fund that was set up in the wake of the sovereign debt crisis. A few of the countries — in particular, the Netherlands —were pushing for some conditionality attached to the loans. However, other nations, such as Italy and Spain, did not want any fiscal targets in exchange for new funding.
Ministers were also divided over developing a new debt instrument. Italy, France, Spain, Ireland and Luxembourg were pushing for a written commitment to work towards joint debt issuance. However, opposition — again, mainly from the Netherlands — has blocked this idea so far.
European ministers will meet again Thursday as they seek to overcome these two differences.