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EU €500bn corona rescue deal

Topics Covered: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

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?

  1. A safety net for healthcare systems.
  2. Safety nets for workers and the self-employed.
  3. 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.
  4. 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:

  1. The new measures come on top of money channelled by national governments to bolster health and other public services, and support workers and industries.
  2. Countries have also pledged to make sure sectors in trouble have access to cash, via public guarantees and deferred tax payments.
  3. 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.

Insta Links:

Prelims Link:

  1. What are Corona Bonds?
  2. EU vs Eurozone vs European Council.

Mains Link:

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.