MNI BRIEF: Eurogroup To Go Easy On Pandemic NPLs In ESM Deal

Eurozone finance ministers are likely to agree to exclude debts acquired as a result of the Covid pandemic from non-performing-loan-reduction targets, as part of a deal to secure Italian support for a reform of the European Stability Mechanism at a meeting later on Monday, officials told MNI.

But countries including Germany, Austria, the Netherlands and Finland remain eager to address the issue of pandemic NPLs at a future point, the officials said, suggesting that the scheduled Eurogroup video call could run long into the evening.

Concessions over pandemic NPLs are seen as necessary for the Italian government to be able to persuade its parliament to ratify the ESM reform, allowing an early introduction of a backstop for the Single Resolution Fund for dealing with bank failures.