EU agrees to $836 bln stimulus plan, but balks at pooling debt

BRUSSELS - European Union finance ministers agreed late on Thursday to a plan calling for 540 billion euros worth of new measures to buttress their economies against the onslaught of the coronavirus, but dealt a blow to their worst-hit members, Italy and Spain, by sidestepping their pleas for the bloc to issue joint debt.

But the ministers were not able to reach an agreement on issuing joint bonds, known as"corona-bonds", despite pleas from the leaders of Italy and Spain, which are bearing the brunt of the crisis, after staunch resistance from Germany, the Netherlands and others. And, in a victory for the Netherlands, which was lobbying to restrict how the bailout funds can be used, the ministers decided they should be limited to health-related programs.

"The most important thing for the finance ministers was to sign off on a deal and a 540 billion euros tagline," said Mujtaba Rahman, the head of Europe practice at Eurasia Group, a consultancy."But despite everyone patting themselves on the back, there are lots of substantive gaps in the deal that will only become apparent later down the line," he added.

The bloc's wealthier countries may have thwarted the joint bonds, but, inevitably, rescue packages for the worst-hit economies will involve subsidies from the richer north to the poorer south, a recurrent, toxic theme in the bloc's history.

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