EU fails to bridge split over ‘coronabonds’

EU finance ministers yesterday failed to agree on a rescue plan to help hard hit member states face the coronavirus outbreak, after the Netherlands blocked the deal over bailout conditions.

"After 16 hours of discussions, we came close to a deal but we are not there yet. I suspended the Eurogroup and (we will) continue tomorrow Thursday," said Eurogroup chief Mario Centeno.

Bickering EU finance ministers were unable to bridge differences on how to rebuild their economies after coronavirus, with a North versus South split that recalled the worst days of the eurozone debt crisis.

The ministers' video conference dragged on from Tuesday into Wednesday, with Italy and Spain insisting on having no strings attached to the aid plan on the table.

With tensions running high, ministers put off an especially touchy discussion on a solidarity fund that would be paid for by European partners jointly borrowing money on the financial markets.

Sometimes called "coronabonds", this proposal was firmly resisted by Germany and the Netherlands and ministers agreed to pass the idea over to EU leaders, who will meet later this month.

Berlin and its allies insist that any European rescue should use the eurozone's existing 410-billion-euro ($443-billion) bailout fund, as well as wait to see the effects of the massive monetary stimulus already unleashed by the European Central Bank.