Rehn calls for EU unity to repair post-coronavirus damage

Olli Rehn, governor of the Bank of Finland, called on European Union (EU) member states to work together to repair the economy damaged by the COVID-19 pandemic, reported Xinhua, quoting a Finnish language daily Helsingin Sanomat on Tuesday.

"The key lesson of the euro crisis is that joint action can prevent the economic crisis and high unemployment from escalating if we act quickly and wisely," said Rehn during an interview with the daily.

"On the other hand, delaying and relying solely on national solutions will exacerbate the crisis, exacerbate the wave of corporate bankruptcies and risk a long-term recession," he warned.

At the end of May, the European Commission proposed a 750-billion-euro recovery fund, which the EU would raise in the form of loans from financial markets to repair the economic damage. Of the fund, 500 billion euros would be provided to member states in the form of grants and the rest 250 billion euros in loans.

Rehn supports the proposal, according to Helsingin Sanomat. However, he pointed out it is not yet clear from the proposal what exactly the conditions for emergency funding would be.

"Conditionality is essential. Funding must be used for health, improving the conditions for sustainable economic growth and employment, achieving climate goals and promoting digitalization. All of these are important goals for the reform of European societies and economies," emphasized Rehn.

"The proposal will enable a more balanced recovery throughout Europe, and it is also in the interests of export-dependent Finland," Rehn told the daily.

The International Monetary Fund (IMF) estimated in mid-April that the economic growth outlook in the eurozone could be minus 7.5 percent in 2020. European Central Bank (ECB) President Christine Lagarde said in late May that the eurozone economy will shrink by 8 to 12 percent in 2020 due to the coronavirus.