The European Stability Mechanism (ESM), currently Portugal's largest creditor, will help States to fight the coronavirus crisis.
The Eurogroup agreed that the mechanism could lend to each country an amount equivalent to 2% of the gross domestic product (GDP), which in the case of Portugal can go up to 4.2 billion euros, at 2019 prices, according to accounts made by Dinheiro Vivo based on the 2019 GDP.
On the issue of eurobonds (European bonds, mutualized public debt), the impasse continues, it appears from the note sent by the informal council of finance ministers of the euro countries, currently led by Mário Centeno. There was no decision worth mentioning in the statement.
This new ESM credit line, which Eurogroup this Tuesday says is “another defense barrier” against the crisis, will be money that can only be used with expenses related to the coronavirus, but the interest rates to be applied should very low, as has been customary for ESM loans.
In any case, being a loan, the money will have to be returned and the countries will have to observe certain conditions in order to guarantee that they “return to a situation of stability”, says Centeno.