Europe commits to €500 billion coronavirus support package; "Sensible and solidary", Dutch FM says

Wopke Hoekstra in Brussels
Wopke Hoekstra representing the Netherlands at a meeting of EU finance ministers in Brussels. Nov. 8, 2019Ale_MiDepositPhotosDeposit Photos

After a failed marathon meeting of some 16 hours on Tuesday, the Eurogroup managed to come to an agreement to help the EU countries most affected by the coronavirus crisis. A total of some 500 billion euros will be made available for this. The agreement "was not without a struggle", Minister Wopke Hoekstra of Finance said to, but he is satisfied with the package, calling it "sensible and solidary". 

The European Finance Ministers agreed that countries can claim aid from the European Stability Mechanism (ESM), an existing emergency fund with 410 billion euros at its disposal, as long as it is coronavirus related. If countries claim from the fund for other reasons, to help their economy for example, there will be strict conditions attached to the loan. The European Investment Bank will make favorable loans available for small and medium sized enterprises. And the green light was given for a European commission program to help companies retain their staff. All in all, the support package involves some 500 billion euros.

Hoekstra called the package sensible because, in his own words, "there is no mention of Eurobonds in any form". Eurobonds, or coronabonds as the are referred to currently, are joint European loans that the European Union member states as a whole guarantee. The Netherlands was firmly against these bonds from the start.

The package is also in solidarity because money is immediately available from the ESM for medical purposes and because there is agreement about other emergency packages, he said. "The loans from the emergency fund must be corona-related, we are not just going to finance the healthcare of other countries," Hoekstra said.

Italy, Spain and Portugal previously accused the Netherlands of showing a lack of solidarity. Italy, the EU country hit hardest by the coronavirus so far, in particular pushed for coronabonds and unconditional use of the emergency fund. 

According to Hoekstra, he made some 50 or 60 phone calls with his fellow Ministers after the failed marathon meeting on Tuesday. They discussed the use of the ESM in particular - a sticking point at Tuesday's meeting. "Some countries think that if there is enough pressure, things will start to move. We can talk about everything. We are in solidarity. But if countries want to invest money from the emergency fund in their economy in addition to the corona crisis, then there are conditions," Hoekstra said to the newspaper.

In its joint announcement, the Eurogroup called the emergency package a European Recovery Fund - an instrument to deal with future crises. French Finance Minister Bruno Le Maire described it as a form of joint debt. Italy and Spain spoke of common funding. But according to Hoekstra, this is definitely not coronabonds. "A meaningless phrase is distilled from the statement. The word 'eurobonds' is not in the text."