Proposed program planned to be like post-war regeneration initiative
European Union finance ministers will gather online on Tuesday to draw up proposals on how to deal with the economic shock stemming from the novel coronavirus pandemic.
The outbreak has reopened wounds that had never been fully healed after the debt caused by the 2008 global financial crisis.
Last week, the President of the European Commission Ursula Von Der Leyen called on European nations to invest billions in the bloc's budget to avert catastrophic economic consequences.
Von Der Leyen proposed that the next EU budget should take the form of a new "Marshall Plan", in reference to the post-World War II fund that rebuilt Europe.
In a guest article for the newspaper Welt am Sonntag, she said that the EU budget was accepted by all member states as a means of leveling out inequalities in a spirit of solidarity and that it should now be tailored to cope with the crisis.
"The many billions that have to be invested today to avert a greater catastrophe will bind the generations together," she wrote, calling the crisis a chance to renew the feeling of community among the nations of Europe.
EU finance ministers have been asked by leaders to come up with a set of proposals to help mitigate the economic impact of the coronavirus by the end of this week.
The joint response will complement the extraordinary stimulus already unleashed by national governments and central banks.
Reuters reports that national fiscal stimuli already amounts to 2.3 percent of eurozone GDP, government guarantees for companies are worth 13 percent of the bloc's GDP, and the European Central Bank has bond buying and liquidity measures in place.
In a video conference on Tuesday, ministers are likely to agree on measures worth more than 500 billion euros ($540 billion), Bloomberg reported.
The Financial Times reported that Italy, Spain, France and their allies urge additional longer-term measures involving the common issuance of additional public debt to fund post-coronavirus spending.
The call for radical rescue measures have reignited a longstanding north-south divide in Europe over mutualizing public debt, with Germany and its northern allies resisting, according to the paper.
Bloomberg said the measures could end up becoming the biggest economic rescue package the continent has seen in peacetime.
The key structures of the package are expected to focus on the European Stability Mechanism, the European Investment Bank and a new European Commission unemployment reinsurance scheme.
Speaking to NBC, Italy Prime Minister Giuseppe Conte renewed his call for joint euro-area debt issuance.
"As the Italian government, I invite all its European partners to approve a European recovery and reinvestment plan," he said on Sunday. "It's an ambitious common plan to rebuild the European economy to be financed through European recovery bonds."
Mario Centeno, president of the Eurogroup, warned ministers not to let dispute jeopardize the detailed rescue package, and promised he would accelerate the debate on future joint tools to pay for post-coronavirus economic rebuilding.
"We certainly need fresh money after this period to leverage a recovery plan," he was quoted by the FT as saying.