The European Union finance ministers’ council (Ecofin) on Monday released member-states from the rules of the Stability Pact so that they have more leeway to deal with the challenges of the novel coronavirus. According to sources, this allows Greece to proceed to a fourth package of fiscal measures for suffering corporations in April.
The activation of the “general escape clause” is now shifting the challenge of supporting the economy from the fiscal to the liquidity field, as the country’s cash reserves will suffice to cover its needs for another three months, according to a Finance Ministry official who spoke to Kathimerini after the Ecofin decision.
The same source said the onus is now on the European Central Bank, which ought to heed the example set by the Fed and promise infinite liquidity, and on the European Stability Mechanism, which has 410 billion euros at its disposal for utilization.
Finance Minister Christos Staikouras expressed satisfaction with the triggering of the general escape clause, as it expands Greece’s weapons to battle the “considerable” damage to the economy as quickly as possible to make it reversible.
The economic support measures will continue next month, raising the cost for the state. Sources say this will include an expanded range of interventions to concern even more corporations hurt by the new crisis. The Finance Ministry estimates the new range will concern another 20-25 percent of companies on top of the 40-45 percent already covered. Therefore, by April, some 60-70 percent of companies will have come under the government’s shield.
Ministry sources say that this new perimeter of businesses is considered to include sectors involved in industrial production and wholesale trade, which to a large extent have not benefited from this month’s measures. The support package for this new category will not be exactly the same as the March package, but somewhat less generous, the same sources note.