The European Union will launch a 37 billion euro (33 billion pounds) investment initiative as part of a package of measures to cushion the bloc’s economies from the impact of coronavirus, European Commission President Ursula von der Leyen said on Friday.
Other steps the EU’s executive will take include giving member states flexibility on budget deficits and state aid, von der Leyen told a news conference, in a move meant to grant full spending flexibility to Italy, the European country so far most affected by the crisis.
The EU will also use 1 billion euros of EU money to guarantee up to 8 billion euros in loans to 100,000 virus-hit firms in tourism, retail, transport, and other ailing sectors, von der Leyen said, confirming a Reuters report earlier this week.
“I am convinced that the European Union can withstand this shock,” she said. “But each member state needs to live up to its full responsibility and the European Union as a whole needs to be determined, coordinated and united.”
Von der Leyen did not provide details on where the pledged money would come from. On Tuesday she announced a 25-billion-euro investment plan based exclusively on existing EU funds already committed to EU states.
EU commission vice-president Valdis Dombrovskis said that the leeway offered to states on spending did not amount to a suspension of EU fiscal rules, but would however allow much more spending and the possible interruption of budget commitments made by EU governments.