March 24, 2020 / 8:54 PM / 15 days ago

Bailout fund could extend 2%/GDP credit to euro countries to fight coronavirus

BRUSSELS, March 24 (Reuters) - Euro zone finance ministers broadly backed on Tuesday an idea that governments might apply for a precautionary credit line worth some 2% of their GDP from the bailout fund to help them fight the economic impact of the coronavirus epidemic.

But the final decision whether the 410 billion euros of unused lending capacity of the bailout fund, called the European Stabilisation Fund (ESM), should be used in such a way, is to be taken by EU leaders at their tele-summit on Thursday.

The ESM credit line would be available to all euro zone countries but not all countries would have to apply for it, or draw from it.

Getting such a credit line, called the Enhanced Conditions Credit Line (ECCL), under European Central Bank rules would entitle governments also to potentially unlimited ECB bond buying, if the bank were to decide it is needed. (Reporting by Jan Strupczewski)

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