MNI SOURCES: EU Sees Pandemic Credit Line Ready By June

--Officials Confident Credit Line Will Be Ready By June

--SURE Unemployment Insurance May Be Delayed Days Or Weeks

By David Thomas

     BRUSSELS(MNI) - European Union officials are confident they can finalise

details of a pandemic credit line programme in time for it to be available to

all euro countries from the start of June, though challenges remain over how

loans will be checked to ensure that they are spent only on the direct

healthcare costs, they told MNI.

     "You can see there is convergence, there is no major obstacle to agreement,

not like at the beginning of April when the Italians had serious objections to

the credit line idea," a senior EU source said.

     Italian officials are still concerned the EU Commission could tighten loan

conditions once the pandemic is over. The Commission has apparently assured

Italy that this is not in fact the case.

     "The pandemic credit line couldn't possibly be used as a basis to ask a

country to apply a macroeconomic programme," the official said.

     --UNEMPLOYMENT FINANCING DELAY

     Meanwhile, another pillar of the Eurogroup's EUR500-billion rescue plan

looks like being delayed. The EUR100 billion SURE program which provides EU

financing for firms on temporary unemployment schemes may not get underway on

June 1 because of the impact of Covid lockdowns on national legislatures, all of

which need to approve the scheme.

     "The likelihood is that the guarantee schemes will not be there by June," a

senior EU source said.

     However, the source added that they were confident that any delay would

only be for "a few days or weeks."

     Talks between the Commission and member states on the former's recovery

fund proposal continue. Big net contributors like Germany, Netherlands, Sweden,

Denmark and Austria are still apparently baulking at increasing the direct

grants element of the proposed stimulus package. The proposal had been slated

for release but this has now been pushed back to May 20 as negotiations

continue.

     Eurogroup ministers will meet again on May 15 when they will hold an

'orientation debate' on the recovery plan. The idea of the discussion is to give

the Commission some sense of the centre of gravity among member states on the

plan.

     "UvL (Commission President Ursula von der Leyen) is finding it difficult to

get agreement among the member states," said one source familiar with the talks

on the fund.

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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