Coronavirus: Eurozone ministers review economic response amid second lockdowns

Saleha Riaz
·2-min read
The ministers will be talking two days before the European Commission issues forecasts for the region that are likely to predict shrinking Q4 economic output. Photo: Getty
The ministers will be talking two days before the European Commission issues forecasts for the region that are likely to predict shrinking Q4 economic output. Photo: Getty

Eurozone finance ministers will review their economic response to the coronavirus pandemic on Tuesday via a video-conference as countries double down on lockdown rules, although pledges of more money are unlikely.

France, Italy and Germany are among nations that have announced stricter restrictions around the movement of people that will be implemented until at least the end of November, moves which are likely to take a further toll on their economies.

The ministers will be talking two days before the European Commission issues forecasts for the region that are likely to predict shrinking Q4 economic output.

In July, the leaders of the 27 EU member states reached an agreement on the of €750bn (£676bn, $859bn) stimulus package to help the European Union get back on its feet economically after the devastating pandemic. The leaders also signed off on a seven-year budget for the bloc of over €1tn.

Now, the bloc’s governments and the European parliament are in talks over the details of the deal.

“What we want to accomplish... is that the legislation is implemented by the end of this year so that the money will be available. That’s the task we are facing right now – and not reshaping things that have already been agreed on,” said Olaf Scholz, Germany’s finance minister, according to a Reuters report. Germany holds the rotating presidency of the EU.

READ MORE: ECB leaves policy unchanged as Europe returns to lockdown

“We absolutely want to ensure that the funds are available everywhere the next year. A lot of countries urgently need this support which Europe jointly is ready to give,” he added.

The ministers will also review the €540bn safety net for individuals, businesses and governments that were set up in April.

Meanwhile, Italy’s deputy economy minister Laura Castelli said the country’s measures to contain the spread of the coronavirus “will be accompanied by a stimulus package to support companies and the supply chain that will be hit by restrictions placed on their activities.”

“We are already working on it and it will be ready shortly,” she said in a Facebook post.

The FTSE 100 fell almost 5% last week as fears gripped investors about looming lockdowns across Europe. Stocks markets across Europe rebounded yesterday though, despite news over the weekend of a second lockdown in England.

Last week, the European Central Bank left its monetary policy unchanged on Thursday, but warned the outlook for the European economy was worsening and laid the groundwork for possible fresh stimulus in December.

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