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EU €500bn corona rescue deal
What to study?
For Prelims and Mains: Key features and overview of the deal.
Context: The European Union (EU) has unveiled a grand €500bn corona rescue deal to cushion the impact of the coronavirus pandemic across Europe.
The deal is on safety nets for workers, businesses and public finances, as well as on a recovery plan.
What are the measures for people and firms?
- A safety net for healthcare systems.
- Safety nets for workers and the self-employed.
- Access to the European Stability Mechanism (ESM): Governments can apply for access to a total of €240 billion being made available under ESM, the bailout fund created during the eurozone debt crisis.
- Under the safety net for companies, small and medium-sized businesses (SMEs) are to be helped via an EU-wide loan scheme.
Other recently announced measures:
- The new measures come on top of money channelled by national governments to bolster health and other public services, and support workers and industries.
- Countries have also pledged to make sure sectors in trouble have access to cash, via public guarantees and deferred tax payments.
- Last month the European Central Bank announced a package worth €750 billion to buy up government and company debt across the eurozone.
What isn’t addressed by the measures?
- The rescue package concerns only short-term economic measures to deal with the immediate impact of the coronavirus pandemic.
- But it does not deal with the thorny question of how to pay for the longer-term reconstruction effort in the aftermath.
- There are big disagreements over how what’s called the “EU Recovery Fund” will take shape.
- What are Corona Bonds?
- EU vs Eurozone vs European Council.
How European nations are dealing with the economic crisis caused due to lockdown imposed in wake of the COVID 19 spread? Discuss.
Sources: the Hindu.