During a teleconference meeting with the finance ministers of the European Union, held on the 23rd of March 2020, Minister for Finance and Financial Services Edward Scicluna welcomed the proposed financial packages prepared by the European Commission, the European Central Bank and the European Investment Bank, and the easing of the Stability and Growth Pact conditions and State Aid regulations.
During his intervention, the minister highlighted the need to adopt a flexible approach to how the proposed measures are to apply to member states to reflect their respective realities and needs. Apart from giving the necessary regulatory flexibility to the banks to be able to advance bridge loans and give moratoria on existing loans, the minister asked the Commission to prepare a recovery plan for member states to provide the needed stimulus to economic growth, once this period comes to an end.
During this meeting, finance ministers discussed the economic impact and the measures being taken to alleviate the effects of this virus, including the proposed measures submitted to the Commission and programmes launched by the European Central Bank.
Given the current situation, the ministers agreed with the Commission’s assessment, issued on the 20th of March 2020, that the conditions for the use of the general escape clause of the Stability and Growth Pact would be met. The use of this clause will ensure the flexibility needed to take all measures for supporting our health and civil protection systems, as well as to protect our economies. This includes further stimulus and coordinated action, suitably prepared by member states.
Ministers also discussed the impact of COVID-19 on the European Semester 2020 and the fact that the current uncertainty limits the capacity to provide fiscal credibility and economic projections. In view of this, the Commission is expected to adopt a flexible and pragmatic approach in carrying out the next steps for the European Semester.
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