EU Finance Ministers Discuss Coordination of Recovery Plans

Euro zone finance ministers were discussing on Monday how to best design and coordinate economic plans to recover from the COVID-19 crisis, while the European Commission said the pandemic was exacerbating economic imbalances within the bloc.

"We will be reviewing the plan the European Union has... to ...recover from the effects of COVID-19 and to do that in a way that is more inclusive and more beneficial for all," the chairman of the ministers Paschal Donohoe said.

The Commission said in a note prepared for the ministers that the pandemic was pushing already highly indebted countries deeper into debt, or increasing problems in areas like competitiveness or employment.

Such divergences between economies sharing the same currency increases the risk of crises and makes the single monetary policy of the European Central Bank less effective.

But reforms and investments funded by European Union money should help address that, the Commission said in its note.

The 27 EU governments have agreed to jointly borrow, spend and repay 750 billion euros to help their economies rebound from the slump induced by lockdowns, and the focus now is on how to best spend that cash.

"A strong implementation of relevant reforms and investments, while making full use of the EU support measures, should tackle the identified imbalances. Addressing imbalances going forward will be key to prevent the risk of accentuating divergences within the euro area," the Commission note said.

Governments are now preparing plans for how to spend the money allocated to them in grants and cheap loans in the recovery fund.

For the plans to be approved by the Commission and by EU finance ministers, they have to take into account various EU recommendations,...