Coronavirus: EU agrees on €500bn for European countries as a rescue package

Coronavirus: EU agrees on €500bn for European countries as a rescue package

Finance Minister in the European Union (EU) have agreed a €500bn (£430bn;$540bn) rescue package for European countries that have been hit hard by the coronavirus pandemic.

The chairman of the Eurogroup, Mário Centeno, announced the deal, reached after marathon discussions in Brussels.

This decision comes as Spain's Prime Minister, Pedro Sánchez said the country was close to passing the worst of its coronavirus outbreak.

Spain has Europe's highest number of confirmed cases, with 152,446 with more than 15,000 people confirmed dead.

The head of the International Monetary Fund (IMF) Kristalina Georgieva has warned that the world is facing the worst economic crisis since the Great Depression of 1930.

At their Brussels talks, EU ministers failed to accept a demand from France and Italy to share out the cost of the crisis by issuing so-called coronabonds.

The package finally agreed upon is smaller than what the European Central Bank (ECB) had urged.

The European Central Bank (ECB) has said the bloc may need up to €1.5tn (£1.3tn) to tackle the crisis.

However, the French Finance Minister, Bruno Le Maire, hailed the agreement as to the most important economic plan in EU history.

"Europe has decided and is ready to meet the gravity of the crisis," he tweeted after the talks.

The main component of the rescue plan involves the European Stability Mechanism, the EU's bailout fund, which will make €240bn available to guarantee spending by indebted countries under pressure.

The EU ministers also agreed on other measures including €200bn in guarantees from the European Investment Bank and a European Commission project for national short-time working schemes.

Ministers were close to a deal on Wednesday, but the talks broke down and had to be resumed a day later, amid a dispute between Italy and the Netherlands over how to apply the recovery fund.

"Our faith in Europe has proven correct!" tweeted the Italian president of the European Parliament, David Sassoli triumphantly, as soon as EU finance ministers announced the deal.

The EU is stumbling through this crisis as it has done through the migration and the financial crises before, for instance. The bloc is not about to disintegrate but scars will remain in countries that felt the chilly absence of EU solidarity in their hour of coronavirus need.

"This has not been our finest moment," a diplomat from an influential EU country told me. "Our response has come late and has been marred by nationalism. Solidarity went out the window with the first coronavirus victim."

The coronavirus pandemic has exposed deep divisions in Europe, where Italy and Spain have accused northern nations - led by Germany and the Netherlands - of not doing enough.

Media caption Italian PM Giuseppe Conte said he might begin to relax some measures by the end of this month

Speaking before the agreement, Italian Prime Minister Giuseppe Conte told the BBC that the EU needs to rise to the challenge of what he calls "the biggest test since the Second World War."

The infection rate is slowing in Italy. Latest figures show positive cases increasing from the previous day by a little over 1%. Two weeks ago, the rise was 7%. The death rate is also falling.

Spain's Prime Minister Pedro Sánchez also said the situation there was improving when he told MPs in Madrid on Thursday:

"The fire starts to come under control."

He vowed that the country would have "total victory" over the virus following the latest data from the past 24 hours, Spain has recorded 683 deaths - a drop from the 757 reported cases on Wednesday.