They are attempting to modify the rescue fund’s requisites to enable assistance to Mediterranean countries which are currently being affected by the coronavirus crisis.
One of the largest advances in the construction of the European Union was the financial crisis which created the ESM, the European Stability Mechanism, which was created with the aim to financially assist any countries in crisis in the future.
The debate about the use of this mechanism, more commonly known as the rescue fund, has now resurfaced with the advent of the coronavirus pandemic, as Italy and Spain struggle to cope with the repercussions of this virus.
Given the exceptional circumstances, the EU would have to change the conditions of the rescue fund to enable access, as currently its use is only permitted under strict protocols. Although both countries are struggling economically, the situation is more dire in Italy, where the prime minister, Giuseppe Conte, has already asked the EU to mobilise these funds and help Italy overcome this medical crisis.
The Italian government has already mobilised over 25,000 million euros, approximately 1.1% of its GDP, as they expect to remain under quarantine until the 3rd of April which will continue to sink its declining economy. Spain is the second country with most positive cases in Europe, after Italy, with a curve of infection even more pronounced and rapid than Italy’s. Spain’s economy also finds itself in a critical situation, both national authorities and economists have asked for some sort of European coordination to control the economic repercussions of this global pandemic.
This rescue fund was constituted in February of 2012, after the EU had to rescue Greece, Portugal and Ireland just months before the financial rescue that was conceded to Spain to alleviate its financial sector.
However, given the exceptional situation that the COVID-19 crisis has generated, they are considering making an exception to these rigid requirements.
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