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After 16 hours of talks, the euro area cannot reach agreement on new coronavirus stimuli

Mario Centeno, Portugal’s finance minister and head of the group of euro area finance ministers, listens during a press conference after a Eurogroup meeting in Brussels, Belgium, on Monday, January 22, 2018.

Eurozone finance ministers failed to reach agreement on Wednesday on how to give additional impetus to the economic impact of the coronavirus pandemic.

The COVID-19 virus, which hit China in late 201

9, has brought major European economies to a standstill. Business operations across the region have ceased, and this is putting pressure on governments to take courageous measures to support businesses and citizens.

However, after 16 hours of talks, finance ministers still disagree on how best to grant loans and whether they should go on to issue common EU debt.

“We were close to a deal, but we’re not there yet,” said Mario Centeno, chairman of the 19 ministerial meeting, on Twitter.

The group had been working on a new line of credit to be provided by the European Stability Mechanism – an emergency fund that was set up in the wake of the sovereign debt crisis. Some of the countries – particularly the Netherlands – pushed for some loan conditionality. However, other nations such as Italy and Spain did not want budget targets in exchange for new funding.

Ministers were also divided over the development of a new debt instrument. Italy, France, Spain, Ireland and Luxembourg pushed for a written commitment to work towards joint issuance of debt instruments. The opposition – again mainly from the Netherlands – has so far blocked this idea.

European ministers will meet again on Thursday to overcome these two differences.

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