June 17, 2020 / 12:09 PM / a month ago

Weaker euro zone members need grants, not loans, ECB VP says

FRANKFURT, June 17 (Reuters) - Indebted euro zone countries such as Italy or Spain need European Union grants rather than loans to deal with the impact of the coronavirus crisis, European Central Bank Vice President Luis de Guindos said on Wednesday.

“If aid is distributed through debt, it aggravates the fiscal situation of some countries,” de Guindos said. “It is very important than countries like Italy, Spain or Greece receive grants.”

The EU has proposed a 750 billion euro aid package with two thirds of it in grants but some frugal northern European nations appear to be deeply sceptical, suggesting that negotiations will be drawn out and the package may be watered down. (Reporting by Jesus Aguado; Writing by Balazs Koranyi; Editing by Alex Richardson)

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