EU proposes triggering crisis clause to allow virus spending
AP

EU proposes triggering crisis clause to allow virus spending

  • 0

BRUSSELS (AP) — The European Union's executive arm on Friday proposed easing the bloc's budget policies so member countries can spend what they need to address the coronavirus pandemic without being subject to deficit limits and other fiscal requirements.

If approved by the leaders of the 27 nations, the move would be the first time the EU activated an escape clause that allows for “a coordinated and orderly temporary deviation" from normal requirements “in a situation of generalized crisis caused by a severe economic downturn," the European Commission said.

“Last week, I said we would do whatever is necessary to support the Europeans and the European economy. Today, I’m happy to say we delivered," commission President Ursula von der Leyen said in a video posted on Twitter. Triggering the escape clause “means national governments can pump into the economy as much as they need."

European countries already are putting funds into boosting health care capacity, keeping businesses afloat and helping citizens taking financial hits amid nationwide lockdowns and government-ordered closures, the EU said. Together with a dramatic falloff in economic activity, the spending “will contribute to substantially higher budgetary deficits," the commission said..

The EU adopted the escape clause in 2011 in the wake of the global financial crisis. The European Commission said that since it forecast a week ago that the virus would lead to a 1% reduction in GDP this year, ”more adverse scenarios, linked to a deeper impact of the pandemic" had become likely.

“Indeed, assuming an extension of the health crisis up to the beginning of June or beyond, the fall in economic activity in 2020 could be comparable to the contraction of 2009," the worst year of the global financial crisis, the European Commission said in a document outlining its rationale for the recommendation.

EU leaders are set to have a summit by video-conference on Thursday.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Concerned about COVID-19?

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular

  • Updated

JERUSALEM (AP) — A small group of Franciscan monks and Roman Catholic faithful took to the streets of Jerusalem’s Christian Quarter in the Old City Sunday to distribute olive branches, after the traditional Palm Sunday procession was cancelled due to restrictions imposed to contain the spread of the coronavirus.

  • Updated

HUANGPI, China (AP) — Stuck in the same bind as many other Chinese farmers whose crops are rotting in their fields, Jiang Yuewu is preparing to throw out a 500-ton harvest of lotus root because anti-coronavirus controls are preventing traders from getting to his farm near Wuhan, where the global pandemic started.

  • Updated

UNITED NATIONS (AP) — The United Nations on Friday announced the postponement of two major events to commemorate the 25th anniversary of the landmark U.N. women’s conference in Beijing because of the coronavirus pandemic, putting off until next year the meetings where thousands of people from across the world will try to make progress toward gender equality.

DUBAI, United Arab Emirates (AP) — Long-haul carrier Emirates said Sunday it has dramatically cut its passenger flight destinations from 145 locations to just 13 countries. It's a pivotal move that reflects the dramatic slowdown in traffic through the airline's hub in Dubai, the world's busiest international airport, due to disruptions caused by the coronavirus.

  • Updated

VATICAN CITY (AP) — Pope Francis celebrated Palm Sunday Mass in the shelter of St. Peter's Basilica without the public because of the coronavirus pandemic, while parish priests elsewhere in Rome took to church rooftops and bell towers to lead services so at least some faithful could follow the familiar ritual.

Get up-to-the-minute news sent straight to your device.

Topics

News Alerts

Breaking News