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EU ministers finally reach compromise over €500bn aid package

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Finance Minister Paschal Donohoe. Photo: Gareth Chaney/Collins

Finance Minister Paschal Donohoe. Photo: Gareth Chaney/Collins

Finance Minister Paschal Donohoe. Photo: Gareth Chaney/Collins

EU finance ministers have reached a compromise which can free up up to €500bn in coronavirus aid - but they remain deadlocked over future debt-sharing proposals aimed at staving off a recession.

On their third attempt, after more than 20 hours of haggling, the ministers agreed multi-tiered rescue plans for European countries hit hard by the coronavirus epidemic.

But they sidelined a demand by Italy and Spain, supported by France and other member states including Ireland, for pooled EU borrowing to mitigate a huge expected recession in the virus aftermath.

While this vexed issue - commonly referred to as coronabonds - remains unresolved, the ministers still stressed other elements of the package deal.

"Europe has decided and is ready to meet the gravity of the crisis," French Finance Minister Bruno Le Maire said soon after the marathon talks via videolink ended last night.

Irish Finance Minister Paschal Donohoe also welcomed the result as a very significant agreement which was reached by the finance ministers who make up the Eurogroup of 19 countries using the single currency.

"It means support will be available for governments, employers and citizens. It took a few hours to agree, but only because this really matters. It is a very important step forward," said Mr Donohoe, who participated in talks from Dublin.

Earlier this week a 16-hour haggling session, spread over two days, ended without a deal, and tensions between several countries ran high.

EU heavyweights France and Germany helped broker a solution to fight economic consequences of the coronavirus pandemic, as the ministers resumed negotiations.

They will now report back to EU leaders expected to have another videolink summit in the coming weeks.

Ireland has already made common cause with a total of nine other member states which are urging an EU-wide coronavirus debt-support scheme.

The others included Belgium, Luxembourg, Portugal and Greece.

These talks focused on overcoming two major stumbling blocks to freeing up a huge multi-faceted EU-driven support package.

One was opposition by the richer states to the idea of the EU underwriting member government debt incurred in fighting the coronavirus economic fallout.

This fundamental row remains to be broached again.

It is clear Germany, Netherlands, Austria and the Nordic countries are implacably opposed and insist the move breaches EU law as it stands.

But compromise was found on the second point of contention which was an insistence by Netherlands and some allied states that strict economic reform conditions be attached to low-interest loans to countries such as Italy and Spain.

Irish Independent