Policy Briefs

P. C. Padoan: Response to Covid-19: Mechanisms against unemployment

At the Eurogroup meeting of April 9 it was decided to introduce new tools to support the economy and/or to strengthen the existing ones to deal with the very serious emergency caused by the Covid-19 shock. These are tools created to respond to the different aspects of the crisis we are experiencing: emergency response, the recovery of growth, and the strengthening of sustainability (including health).

In recent weeks the debate on the response to the coronavirus crisis has taken on a "toxic" pitch. In Northern Europe the toxic term was "eurobonds", in southern Europe it was "ESM" (European Stability Mechanism). After the Eurogroup meeting on April 9, the debate seems to be going differently. The issues on the table include what the objectives of European economic policy must be to combat the crisis and afterwards what the instruments should be. In this context, the overall effectiveness of the toolbox) as well as the impact of the individual tools, must be assessed.

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