Today the Eurogroup held a conference call to take stock of the latest developments and the impacts on financial markets and the broader economy as a consequence of the spread of the coronavirus.
Given the topic at hands, I have invited ministers from non-euro area member states to join our call.
This outbreak is having a negative impact on the global economy, but the extent and duration of the problem is still uncertain at this stage.
We are monitoring the situation very closely and let me assure you that no efforts will be spared to contain the disease, to provide for health services and civil protection systems to support the population in the most affected areas and to shield our economies from further damage.
Today’s meeting was a first opportunity to share information about the measures taken at national and European level to respond to this outbreak.
The impact of the virus has hit some areas particularly hard, and the response has been differentiated. We welcomed the measures taken in some Member States and the policy action by the European Commission.
Given the potential impact on growth including the disruption of supply chains, we will coordinate our responses and stand ready to use all appropriate policy tools to achieve strong, sustainable growth and to safeguard against further materialization of downside risks.
We are prepared to take further policy action. This includes fiscal measures - where appropriate, as they may be needed to support growth.
Our fiscal rules framework provides for flexibility to cater for “unusual events outside the control of government”. It is up for the European Commission to implement these rules and assess requests from member states.
To be specific, in the rules of the Stability and Growth Pact, this clause allows for a temporary deviation from the adjustment path, while preserving fiscal sustainability.
This clause can be used to the extent needed, provided that additional spending is proved to be linked with the unusual event and if it is only of temporary nature.
We mandated our deputies to work on policy options in cooperation with the institutions to enable us to have a structured discussion in our meetings of mid-March. We will then reassess the situation and any further steps, proportionate with the risks, as they unfold.
This will cover the full range of fiscal, financial and structural policies that are important to safeguard the wellbeing of our citizens and dampen the negative effects of the coronavirus on growth.