April 29, 2020 / 7:54 PM / a month ago

EU's Gentiloni urges Europe to get recovery plan for second half of 2020

FILE PHOTO: European Economic Commissioner Paolo Gentiloni speaks during a news conference on public finances in EU states at European Union Commission headquarters in Brussels, Belgium February 26, 2020. REUTERS/Francois Lenoir

PARIS (Reuters) - Europe’s recovery plan should be ready to kick in in the second half of the year and not drag on until December or later, European Commissioner Paolo Gentiloni said on Wednesday.

In an interview with French newspaper Les Echos, Gentiloni, a former Italian foreign minister, said the recovery plan, which EU leaders are still discussing, should be formed of a mix of grants and loans to the hardest-hit countries.

“In my view, this recovery strategy should start in the second half of 2020, and not in December. It is urgent,” Gentiloni was quoted as saying. “Waiting for a year is out of the question,” he added.

EU leaders leaders agreed on Thursday to build a trillion-euro emergency fund to help recover from the coronavirus pandemic, but left divisive details until the summer, in particular whether cash from the richest countries is given or lent to the most affected ones.

“Subsidies will have to be focused on the hardest-hit areas and sectors,” Gentiloni said, adding that loans should have long maturities so as not to burden already debt-ladden states.

Gentiloni also said he did not expect EU rules on deficits to be reactivated for the coming months, but that after the crisis countries will still need a strategy to reduce debt.

Reporting by Michel Rose; editing by Jonathan Oatis; Editing by Chris Reese and Jonathan Oatis

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