By Francesco Guarascio
BRUSSELS (Reuters) – European Union leaders will hold emergency talks soon to discuss a joint response to the coronavirus, officials said on Monday, as the bloc’s executive considers relaxing state subsidy rules to allow extra public spending.
The announcement of the teleconference, likely to take place on Tuesday, came after Italy and France called for Europe-wide stimulus to counter the economic impact of the epidemic.
The spread of coronavirus from China across Asia, Europe and the Americas has caused huge disruption to business operations, supply chains and economic activity. Analysts say the world economy is headed for a sharp downturn, possibly a recession.
“Following consultations I will hold a EUCO members conference call shortly on COVID-19 to coordinate EU efforts,” tweeted Charles Michel, who chairs EU summits. “We need to cooperate in order to protect the health of our citizens.”
Separately, the head of the European Commission Ursula von der Leyen said on Monday the bloc’s executive was considering all options to help the economy.
The commission was assessing conditions to grant flexibility to states in providing public subsidies to crisis-hit sectors, she added .
Temporary suspensions to the bloc’s state aid framework, which is meant to avoid unfair competition, were introduced after the 2008-09 financial crisis and let governments spend hundreds of billions of euros to bail out banks.
On Saturday, Brussels effectively authorized Italy’s emergency measures to tackle the impact of the outbreak, using a waiver under EU fiscal rules that allows for more spending in exceptional circumstances.
That flexibility will allow Italy, the worst-hit EU country, to increase its budget deficit above EU limits.
Von der Leyen said the EU could also spend some of its own money to combat the crisis, but admitted resources were scarce.
“If I look at the tasks ahead of us, we are running short of the flexibility to act in crises as we see them right now,” she said.
As she spoke, EU institutions and other Brussels-based bodies were arranging for staff to work from home.
The EU Parliament on Monday shortened its monthly four-day plenary sitting to only one-and-half days to reduce contagion risks, after it had earlier decided to extraordinarily move it from Strasbourg to Brussels .
The EU council, which hosts meetings of national diplomats and ministers, last week sent home more than 50 people after two infections among its staff.
A first case was also detected at the EU Commission, a spokeswoman for the body said on Monday.
A NATO spokeswoman said on Monday the military alliance had sent home some staff after one official working at the Brussels headquarters had tested positive.
(Reporting by Francesco Guarascio; Additional reporting by John Chalmers, Philip Blenkinsop, Gabriela Baczynska and Marine Strauss; Editing by Andrew Heavens and Andrew Cawthorne)