ECB urges measures worth 1.5 trillion euros this year to tackle virus crisis: sources

BRUSSELS (Reuters) – The European Central Bank told euro zone finance ministers that the bloc may need fiscal measures worth up to 1.5 trillion euros ($1.6 trillion) this year to tackle the economic crisis caused by the COVID-19 epidemic, officials told Reuters.

An ECB spokesman declined to comment.

In a videoconference meeting, the EU Commission estimated that the bloc’s economy could shrink by 10% this year, officials said. But ministers remained divided on how to boost the economy and failed to agree on a common text.

In the conference, which ended on Wednesday without a deal after 16 hours of talks, Germany, the Netherlands and other northern European countries were ready to support EU measures worth 500 billion euros, officials who participated in the meeting said.

The EU support would back up national measures, but the overall fiscal effort may not be enough to meet total financing needs, the officials said.

In the meeting France, Italy and Spain said the European effort to tackle the crisis should be well above 1 trillion euros this year, officials said, in line with the ECB estimate of financing needs of 1 to 1.5 trillion.

While the participants narrowed the gap in views during their lengthy talks, a deal could not be reached mostly due to resistance from the Netherlands and Italy, officials said.

Italy wanted a more ambitious agreement with clearer references to future common debt issuance, while the Netherlands pushed for conditions to any EU credit line to countries in need.