Europe needs at least €500 billion from EU institutions for #Coronavirus recovery - ESM

In an interview with Italy’s Corriere della Sera paper, published on Sunday (19 April), European Stability Mechanism Managing Director Klaus Regling (pictured) said the easiest way to organize such funds would be via the European Commission and the EU budget.

“I would say that for the second phase we need at least another €500bn from the European institutions, but it could be more,” Regling told the paper.

“For that, we need to discuss new instruments with an open mind, but also use the existing institutions, because it is easier, including in particular the Commission and the EU budget. Rethinking European funds can go a long way in keeping the European Union together,” Regling said.

European Union finance ministers agreed on April 9th on safety nets for sovereigns, companies and individuals worth in total €540bn.

They also agreed that the eurozone, which the IMF predicts will plunge into a 7.5% recession this year because of the pandemic, will need money to recover, but they had different ideas on how much is needed and how to raise it.

EU leaders are to discuss that at a vide-conference on 23 April. The idea around which a compromise may emerge is likely to involve the European Commission borrowing on the market against the security of the long-term EU budget and leveraging the money to achieve a bigger effect.