March 18, 2020 / 9:55 PM / 12 days ago

UPDATE 1-French finance minister ups pressure on ECB over crisis response

(Adds details)

PARIS, March 18 (Reuters) - The European Central Bank needs to “quickly and massively” step up its response to the economic fallout from the coronavirus outbreak, France’s finance minister said on Wednesday, putting pressure on the ECB.

Bruno Le Maire said he was closely following the blowout in spreads between the different borrowing costs of euro zone countries after Italian yields surged in recent days over concerns about the sustainability of its debt.

“I’m watching the interest rates everyday. We want the European Union to show its determination and its solidarity,” Bruno Le Maire told journalists on a conference call.

“All of the instruments available to the European Central Bank should be used quickly and massively,” Le Maire said.

While the ECB was in the front line of the crisis response, the European Stability Mechanism bailout fund was also available to be used, Le Maire added.

The European Stability Mechanism (ESM) bailout fund was created at the height of last decade’s sovereign debt crisis to be a lender of last resort to governments cut off from markets. It has 410 billion euros of unused lending capacity. (Reporting by Leigh Thomas; Editing by Sandra Maler and Peter Cooney)

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