By Joseph Boris

Law360 (April 9, 2020, 9:28 PM EDT) -- European Union finance ministers agreed late Thursday on €500 billion ($546 billion) in emergency funding to counter economic damage wreaked by the novel coronavirus pandemic, but they deferred action on a blocwide plan for sharing costs incurred by the outbreak.

In remarks after their meeting and an official statement, ministers said the spending would be temporary and targeted, but they didn't mention bonds issued by EU countries using the euro currency. That has been a key point of disagreement among ministers in the so-called Eurogroup, whose governments face pandemic-induced budget deficits that jointly issued bonds could help fill in lieu of potentially crippling tax increases later.

The agreement, reached after 10 p.m. in Brussels following an unsuccessful, 14-hour negotiating session Tuesday, was hailed by the head of the ministers' group as a breakthrough in EU unity. The ministers had gathered to discuss how the EU could calm financial havoc among member countries amid the pandemic and craft a plan for recovery once the crisis recedes.

In agreeing to establish a large-scale recovery fund to help that recovery, however, ministers left key questions still to be resolved about the size, timing and financing source of the fund.

Mário Centeno, president of the Eurogroup as well as Portugal's finance minister, said the accord avoids mistakes the EU made following the financial crisis of 2008-2009, in which countries were forced to prioritize balancing their budgets, often through higher taxes, over economic growth and additional borrowing.

"This response contains bold and ambitious proposals that would have been unthinkable just a few weeks ago," Centeno told a news conference in Brussels after the meeting.

"We can all remember the response to the financial crisis of the last decade, when Europe did too little, too late," he said. "This time around is different."

Under the deal, member states will be eligible for credit lines from the bloc's permanent bailout fund, the European Stability Mechanism, or ESM, equal to at least 2% of a country's gross domestic product, up to €240 billion.

In their statement, finance ministers said they would try to arrange access to the ESM within two weeks, to help all EU countries — not only those in the euro currency area — cover public health costs tied to the pandemic.

The statement said that over time, countries would "remain committed to strengthen economic and financial fundamentals," a demand of some northern EU members.

"With this package, we will help countries in need in the short term while also building resilient economies in the long term," Dutch Finance Minister Wopke Hoekstra said. "This is a powerful and sensible sign of European solidarity."

The finance ministers also voted to support a program that would supply up to €200 billion in loans to companies within the bloc, backed by €25 billion in member state guarantees for the European Investment Bank.

Also agreed to was a €100 billion jobs support program favored by the European Commission, the union's executive arm. The program would enable the commission to borrow directly in financial markets, with guarantees from member states, to help governments subsidize companies so that they don't lay off workers.

While the Eurogroup statement didn't mention bonds, it said further discussion on financing the emergency measures would include "innovative financial instruments, consistent with EU treaties."

The Netherlands, Austria, Finland and others in the bloc have expressed opposition to the use of Eurobonds for crisis-response financing, saying the move would undermine stability in the 19-nation eurozone and be out of step with EU and domestic laws.

In coming months, the measures agreed to should provide additional liquidity to both businesses and member governments through credit lines, the statement indicated.

EU members in southern Europe, including hard-hit Italy and Spain, have called on immediate debt issues backed by Brussels to help them handle the pandemic's growing costs.

--Editing by Tim Ruel.

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