Left Menu
Development News Edition

ESM bailout fund could issue "corona bonds" to finance credit for governments

Reuters | Brussels | Updated: 26-03-2020 22:43 IST | Created: 26-03-2020 22:43 IST
ESM bailout fund could issue "corona bonds" to finance credit for governments

The euro zone's ESM bailout fund could issue "Social Stability Bonds" or "corona bonds" if it needs to raise money for standby credit that euro zone governments can tap to fight the coronavirus epidemic, slides prepared by the fund showed on Thursday. The European Stability Mechanism (ESM) fund, owned by euro zone governments, borrows money on the market to lend it on to sovereigns in need. But it does not usually name the bonds it issues.

The slides, prepared for a teleconference of EU leaders, showed that a credit line - should a government choose to apply for one - could be worth up to 2% of a country's GDP and be available for 12 months, with a possibility of extending that to up to two years. If it is used, the money drawn would have to be repaid within an average period of five to 10 years, the slides showed.

The credit line, which also opens the possibility of unlimited bond purchases by the European Central Bank, under its Outright Monetary Transactions scheme, would carry a smaller than usual service fee, normally set at 85 basis points. To get the standby credit, a government would need to have its debt sustainability assessed by the European Commission -- a condition the highly indebted Italy is not keen on.

The slides showed that the Commission would prepare a debt sustainability analysis for all euro zone countries by the end of March so that they can all apply for the credit, should they want to.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.


TRENDING

OPINION / BLOG / INTERVIEW

Globalization post-coronavirus to get a hit, self-sufficiency paradigm to rule

The massive scale of coronavirus outbreak, accompanied by uncertainty and fear, could lead to new behaviors and beliefs in the 21st-century population that is empowered with the internet....

Ayurveda for COVID 19: Professionals owe the responsibility to protect it from quacks and fake news

Indian Ayurveda professionals are lagging behind their foreign counterparts in handling quacks and protecting credentials of the Ayurveda at the time of COVID 19 pandemic. The professionals of Ayurveda cannot abjure the responsibility to co...

Education post-coronavirus: Schools to rush for more digitalization

Digital education would undoubtedly boom in the post-coronavirus world, supported by educational institutions that have discovered its efficiency during the crisis, but it is still not expected to outshine traditional classroom learning....

Videos

Latest News

OG take over first place in ESL Pro League Europe action

OG remained undefeated and moved into first place in Group C with a 2-0 victory over G2 Esports on Tuesday in the ESL Pro League Season 11s Europe competition. OG improved to 3-0 by beating G2 16-7 on Mirage and 16-8 on Dust II in the onlin...

POLL-With 2020 race all but halted over coronavirus, Biden quietly widens lead over Trump

Democratic presidential front-runner Joe Biden has quietly expanded his lead over President Donald Trump among registered voters, even as the rapidly spreading coronavirus has all but sidelined the former vice presidents campaign, according...

U.S. rushes to build makeshift hospitals as death toll rises over 800

The U.S. government raced on Tuesday to build hundreds of makeshift hospitals near major cities to ease the strain on overwhelmed healthcare systems as President Donald Trump predicted a very painful two weeks ahead.The death toll in the Un...

Soccer-Ex-Marseille chief Pape Diouf dies after contracting coronavirus

Former Olympique de Marseille president Pape Diouf has died aged 68 after contracting the coronavirus, the Ligue 1 club announced on Tuesday. It is with great sadness that Olympique de Marseille learned of the death of Pape Diouf, the club ...

Give Feedback