Support withdrawal needs to be handled carefully

European Commissioner for Economy Paolo Gentiloni warned on Monday that the withdrawal of public support for firms hit badly by the COVID-19 pandemic had to be managed "very carefully" as blanket measures are lifted and replaced with more targeted assistance, reported Xinhua.

Addressing a news conference following the February meeting of Eurogroup finance ministers, Gentiloni said this was necessary to avoid a sharp rise in insolvencies in the future.

"We will need to make wise choices in terms of fiscal policy, to avoid the premature withdrawal of supportive measures," he said.

His message was echoed by Eurogroup President Paschal Donohoe who said the finance ministers had agreed that the assistance would remain for as long as possible as it had helped keep many businesses afloat during lockdowns.

"This has been a success story, but we are aware that difficult times could lie ahead. Most businesses certainly have a bright future, but many businesses are going to need time to repair their balance sheets," said Donohoe.

"As the recovery phase is kicking in, we will move to a phase of more targeted measures with the difficult question of how to identify viable firms that will still need our support," Donohoe said, adding that this will be discussed in the April meeting.

The ministers also discussed the international role of the euro, with the aim to reduce dependence on other currencies, and to strengthen autonomy. During the discussion, the attendees also emphasized the potential of green bond issuance to enhance the use of the euro by the markets while also contributing to achieving climate transition objectives.

Gentiloni spoke about the need "to win the race that is underway between injections and infections," stressing that the pandemic was also an economic issue. The EU's winter forecast is relying on the relaxation of measures in the second half of the year, by when an increasing share of the adult population would have been vaccinated.