Economy of the European Union

European Union finance ministers failed to agree in all-night talks on more support for their coronavirus-hit economies and their chairman said on Wednesday morning he was suspending the discussions until Thursday.

The European Central Bank told eurozone finance ministers that the eurozone could need fiscal measures worth to 1.5 trillion euros this year to tackle the economic crisis caused by the COVID-19 epidemic, officials told Reuters.

Greek Finance Minister Christos Staikouras was upbeat Wednesday that remaining differences between eurozone governments regarding a trillion euro package to support the economy against the coronavirus pandemic would be bridged by Thursday.

The chairman of eurozone finance ministers Mario Centeno said on Wednesday he was suspending talks on half a trillion euro package to support the economy against the coronavirus epidemic until Thursday, to bridge divisions over its elements.

As eurozone finance ministers met into the night to discuss the bloc's response to the Covid-19 pandemic, Prime Minister Kyriakos Mitsotakis meanwhile welcomed a decision by the European Central Bank to accept Greek government bonds as collateral as a move "that will further boost liquidity in the economy."

The European Central Bank took more emergency action Tuesday to keep credit flowing to companies in the 19 countries that use the euro by easing its rules for lending to banks that serve those businesses.

Markets and all EU member-states, especially those in Southern Europe which like Greece seek some form of mutualisation of debt have been  focusing like a laser beam on today's Eurogroup meeting and analysts expect joint action to help prop up the economies of member states - possibly including even so-called coronabonds.

Eurozone finance ministers hope to agree on Tuesday on half a trillion euros worth of economic aid to finance recovery from the coronavirus, a discussion that has sown divisions as the bloc struggles with the outbreak.

In an article published in Tuesday's Kathimerini, Finance Minister Christos Staikouras calls on his colleagues in the Eurogroup council of eurozone finance ministers to show solidarity as they convene on the same day and approve "a catalytic move that will offer a strong injection of liquidity to the economy."

The problem. Mitigating the impact of the Covid-19 pandemic will require a significant increase in public spending to rescue sinking economies and further shield health systems. At the same time, tax revenues will be collapsing as long as economic activity remains suppressed. Budget deficits will inevitably swell, leading to soaring public debt.