The President of European Parliament David Sassoli claims on Twitter that the old European Stability Mechanism (ESM) doesn’t exist anymore and it has become a fund that all member countries can take advantage of without conditionalities, to cope with medical emergency caused by Covid-19 pandemic. The claim seems to be his remark following the Eurogroup videoconference of 9 April 2020. Sassoli mentions assets for hospitals, medical staff and other useful equipment to grant health safety.
The Eurogroup of 9 April 2020 was commissioned to find a comprehensive economic policy response to the Covid-19 outbreak. The result of the videoconference is a proposal in 23 points. Point 16 refers to ESM, a fund to grant conditional financial assistance to member countries that are experiencing temporary difficulties in raising funds on the market, despite having sustainable public debts. Paragraph 16 states that the only requirement to access the credit line will be its use to support domestic financing of direct and indirect healthcare, cure and prevention related costs due to the COVID 19 crisis. Sassoli’s claim is incorrect, since it is not complete. As a matter of fact, paragraph 16 specifies that euro area Member States will remain committed to strengthen economic and financial foundation, consisting in EU economic and fiscal coordination and surveillance frameworks, including any flexibility applied by the EU institutions.
Going further, it is false that the so called “old” ESM doesn’t exist anymore, for two reasons. On the one hand, the mechanism to access credit lines remains regulated in the Treaty for all others requests of financial support, not related to healthcare costs due to the pandemic. On the other hand, the Eurogroup has no power to decide, but only to approve a proposal to be voted on by the European Council and the European Commission. The new conditions to access credit lines are not yet operational.
The claim is mostly false. A window on to ESM for coping with Covid-19 emergency has been opened indeed, but Sassoli’s claim is incorrect. It can be considered as a political declaration of intent, aimed at conveying trust and reliability to member countries.
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