Tuesday 6 October 2020 5:11 pm

Finance ministers give EU recovery fund the green light

European Union finance ministers gave the green light to the €750bn (£682bn) coronavirus recovery fund that was first outlined by the bloc’s leaders in July.

It means the European Council – the heads of EU states and the bloc’s top brass – can now negotiate the details of the fund with the European Parliament.

Read more: ECB’s Christine Lagarde: Coronavirus cases putting recovery at risk

Following a meeting of EU member state finance ministers, German finance minister Olaf Scholz said: “We have equipped ourselves with what we need now because we’re still in a difficult situation vis-a-vis infections.”

He urged all parties to move quickly to finalise the details of the fund and to make it become law. “It’s extremely important that these major challenges have to be taken on board and shouldered quickly,” he said. 

“The funds have to be made available where they’re needed quickly for the various programmes, so that those programmes can get up and running to meet the challenge of the crisis.”

‘Time is of the essence’

Valdis Dombrovskis, European Commission vice president for the economy, said: “We now look forward to the European Parliament also coming with its negotiation position so that negotiations and dialogues can start as soon as possible.”

“Time is of the essence, we want to make this new facility operational quickly so that it can support the recovery and members states can move forward with their reforms and investments.”

There was little disagreement over the fund in the finance ministers’ meetings. Rising coronavirus cases across Europe have prompted governments to act fast.

The Eurozone economy shrank by 11.8 per cent in the second quarter, the biggest drop on record. Although GDP has rebounded relatively strongly, economists say a second wave of Covid would derail the European economy.

Earlier today, European Central Bank (ECB) president Christine Lagarde expressed worries about the recovery due to rising cases.

Read more: IMF and WTO: Economy brighter than expected but big risks remain

“Instead of that V shape that we all long for and hope for, we fear that it might have that second arm of the V a little bit more shaky.” 

Also at the ministers’ meeting, which was held virtually, participants agreed to nominate Swedish finance minister Magdalena Andersson to head the International Monetary and Financial Committee, the steering board of the International Monetary Fund (IMF).