The Limited Times

Now you can see non-English news...

Brussels urges to accelerate the negotiation of the recovery fund in the face of the second wave of infections

2020-10-27T22:11:27.403Z


The ECB is committed to creating a European 'bad bank' in the face of the expected increase in non-performing loans


Brussels dampens prospects for a rapid recovery as countries reimpose tough restrictions on the lives of their citizens to slow the further advance of the pandemic.

Faced with the second wave of infections, the Commissioner for the Economy, Paolo Gentiloni, urged the Council and the European Parliament on Tuesday to "redouble their efforts" to be able to implement the plan to recover quickly.

The president of the ECB's Supervisory Board, Andrea Enria, warned of the increase in delinquencies that the second phase of the pandemic will entail and advocated creating a

bad

European

bank

.

The European Commission will review the forecasts for the EU economy for this year and next week next week, which until now showed a drop of 8.7% for 2020 and an advance of 6.1% for 2021. Everything indicates that Brussels will be less optimistic about the economic recovery, which will be impacted by the second round of restrictive measures adopted from Madrid to Prague, which is assuming that millions of businesses will have to lower the blind again.

"Europe is now experiencing a strong second phase of the pandemic, with numbers going astray across the continent," Gentiloni lamented at a conference organized by the

CEPS

think tank

.

Capitals drew their artillery during the first wave of infections to protect their economies, although some countries did so more forcefully than others.

Only Germany left more than half of the 2.94 billion euros that the 27 have allocated to state aid.

For this reason, the commissioner asked to deploy the emergency agreements of the Eurogroup of last April to rescue the European economy with a loan package of up to 570,000 million euros.

In fact, Gentiloni recalled that yesterday Spain, Italy and Poland began to receive on Tuesday the first disbursements of the so-called SURE fund (for now, 17,000 million) to finance temporary employment protection systems, such as ERTE.

The Italian also demanded that negotiations for the recovery fund, of 800,000 million euros, be accelerated between the Council and the European Parliament.

Both institutions have become embroiled in a battle for 39 billion euros in talks over the fund and the EU budget.

This blockade has led Brussels to the conviction that the fund will not be ready on January 1, as demanded by Italy and Spain, since it must be ratified by the 27 national parliaments and the European Parliament.

Every day counts of delay counts, since Brussels believes that if they arrive on time they will be able to start issuing debt next summer.

The commissioner also called for "maintaining support for the European economy" in the face of the second wave.

"As long as necessary for as long as it is necessary," he warned. "I think we have learned the lessons of the past crisis," added the commissioner. Brussels this time for now is fleeing austerity policies and will

de facto

keep

the Pact

suspended

of Growth and Stability throughout 2021 and “as necessary.” Furthermore, Gentiloni linked the return to fiscal rules with his reform. “The debate on how and when to normalize fiscal policy cannot be kept in isolation from the debate on how to improve our governance framework ”, he added.

“Expected increase” in non-performing loans

Brussels also fears that a slow recovery or a possible relapse in the last quarter could amplify the problems of the European banking system.

It is not the first time that the community institutions have warned about this.

And yesterday Andrea Enria was added to that call.

In an appearance by videoconference in the European Parliament, the president of the Supervisory Board of the ECB said that an increase in non-performing loans is expected, especially when the support measures and moratoriums that the EU countries have deployed begin to withdraw .

Enria recovered the idea of

the bad

community

bank

, which he referred to as "a European initiative" that could consist of the union of national asset management companies (in the Spanish case, Sareb).

This grouping, in his opinion, would make it possible to face the "expected increase" in delinquencies and guarantee equal conditions within the Banking Union.

Enria said he was aware of the controversy generated by this proposal due to the "fear" that it would lead to a mutualisation of losses in the EU.

Faced with this fear, the Italian defended that

bad banks

, if well designed, allow the banking sector to clean their balance sheets "faster" without losses for taxpayers.

Source: elparis

All business articles on 2020-10-27

You may like

News/Politics 2024-02-15T10:32:21.697Z

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.