“The coronavirus pandemic has drastically changed the European Union’s economic prospects, and accordingly it is in the common interests of all EU member states for rapid and equitable measures to also be introduced at EU level”, Minister of Finance Mihály Varga declared during a videoconference of EU economy ministers on Tuesday.

“During the development of crisis management programs, major emphasis must be placed on protecting jobs, and on the financial security of families and enterprises”, the Minister highlighted.

At the meeting, the ministers discussed, amongst others, the remaining open issues relating to one of the elements of the triple safety net adopted in April, the pan-European guarantee fund of the European Investment Bank (EIB). According to plan, the guarantee fund, which would be established using member state counter-guarantees, would realise the disbursement of some 200 billion euros in credit for the European small and medium-sized enterprise sector.

“The Hungarian government agrees that the provision of loans to small businesses must be facilitated. However, a major risk is posed by the fact that the final guarantee and collateral for the fund established by the EIB would be the budget of member states”. Mr. Varga emphasised. As he explained, there are no good experiences concerning the utilization of centrally supervised funds, and particularly in view of geographical imbalances that may be observed with relation to their application.

“In recent months, all countries have mobilized their own resources to introduce important measures to handle the economic effects of the epidemic, and accordingly the retention of state counter-guarantees within a national sphere of competence promises to be a more effective instrument for encouraging lending”, the Hungarian Finance Minister added.
At the meeting, the EU finance ministers also discussed the European Commission’s action plan to combat money laundering, as well as the EU’s 2020 country reports.

(Ministry of Finance/MTI)