On Monday 23 March, the European Finance Ministers agreed that the conditions were fulfilled to activate the general escape clause provided for in the Stability and Growth Pact (Regulations 1466/97 and 1467/97) in order to strengthen the budgetary measures to fight the COVID-19 pandemic in an unprecedented way.
"Ministers agree with the assessment of the European Commission (...) that the conditions for the use of the general escape clause - a severe economic downturn in the euro area or the Union as a whole - are fulfilled", says the statement they adopted by consensus after their meeting by videoconference.
According to the ministers, "the use of this clause will ensure the needed flexibility to take all necessary measures for supporting our health and civil protection systems and to protect our economies, including through further discretionary stimulus and coordinated action", designed to be "timely, temporary and targeted".
This agreement "will give us the opportunity to go further with providing fiscal incentives to our economies", said Croatian Finance Minister Zdravko Marić, via Twitter.
And the declaration to underline that Member States remain committed to respecting European budgetary rules. The European Commission, to which the Twenty-Seven will send their National Stability and Reform Programmes, will play a coordinating role.
Held behind closed doors, the discussions on this issue did not appear to be confrontational, according to several diplomats who attended them. One of them pointed out that the Eurogroup had already shown the way last week. It had welcomed the fact that the Commission was ready to activate the clause in question (see EUROPE 12448/3).
Mobilisation of the ESM? On Tuesday, euro area finance ministers, meeting again by videoconference, will discuss possible intervention by the European Stability Mechanism (ESM), the euro area's permanent rescue fund currently with an intervention capacity of €410 billion.
According to its President, Mário Centeno, "the Eurogroup will consider options to add a new line of defence against the coronavirus as part of our coordinated crisis response".
These options include the unprecedented granting of credit lines (ECCLs and PCCLs) to euro area countries facing exceptional difficulties, but which remain solvent to the extent that they continue to have market access (see EUROPE 12451/1).
Other voices, such as that of the Governor of the Banco de Portugal, Carlos Costa, are calling for the ESM to issue "coronabonds" to give euro area countries even more budgetary means while being protected by the financial strength of the permanent rescue fund.
The question of risk pooling and the conditions attached to these two types of aid will be at the heart of the negotiations.
On Sunday the Spanish Prime Minister, Pedro Sánchez, called on Europe to set up "a great Marshall Plan". The President of the European Council, Charles Michel, has convened a third summit by videoconference for Thursday 26 March.
G20. On Monday, the G20 finance ministers and central bankers also held a videoconference to coordinate, this time at the international level, the efforts undertaken to counter the pandemic, although they did not adopt a joint communiqué.
"On behalf of the EU, I underlined the seriousness of the pandemic in Europe and detailed the measures taken to address its unprecedented impact on our economies. First to win the battle for life and then to prepare for reconstruction", said the Commissioner for the Economy, Paolo Gentiloni.
For the French Finance Minister, Bruno Le Maire, the meeting served to confirm the "violent" economic impact of the health crisis on global growth and financial support for developing countries and to prepare "a common exit strategy from the crisis". Support for developing countries will be provided through the World Bank and the International Monetary Fund (SDR allocations and swap lines).
Invited to participate in the discussions, Switzerland supported the idea of setting up a think tank to quickly draw on the consequences of the crisis.
The Saudi presidency of the G20 has indicated that this meeting will lead to an extraordinary summit of the leaders of the world's 20 largest economies this week or early next week, a date not officially communicated. (Original version in French by Mathieu Bion)