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Coronavirus: Eurogroup president says now not the time for red lines

Eurogroup President Mario Centeno

The common European answer to the coronavirus crisis that is currently being drawn up will help countries with the characteristics of Cyprus, President of the Eurogroup Mario Centeno said on Sunday.

Speaking to Politis, he explained the importance of innovative solutions for natural resources so the eurozone does not find itself in the face of a new crisis or an asymmetric recovery, with countries with limited fiscal capacity lagging behind.

“The message is simple: help is on the way,” he said just a day before the European Commission announces details of the Recovery Fund.

“The combination of emergency measures approved by the Eurogroup and the Recovery Fund will ensure the conditions for an appropriate response in each Member State,” he said.

On the major issue of recovery financing, Centeno was clear: “We need to be innovative. Common debt issuance would be a way to raise significant amounts needed for recovery. There are other solutions. We need to stay open and focus on solutions. This is not the time for red lines.”

Arguing in favour of the issuance of a common debt, he reiterated three times the importance of distributing the cost of recovery across the long term so the risk of a new economic crisis is avoided. In addition, he stressed that this is important for countries that needed help in the last debt crisis, namely Cyprus, Greece, Portugal, Ireland and Spain.

For Cyprus he said the issuing of guarantees through EU bodies is the right direction to take for handling the crisis.

He said the impact of coronavirus was more serious in Cyprus because it is a more open economy, depending on exports and the tourism sector.

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