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EU needs comprehensive fiscal response to coronavirus: Spain’s foreign minister

MADRID (Reuters) – The European Union needs to provide a “comprehensive and solid” common fiscal response to the coronavirus crisis to convince markets and reduce volatility, Spanish foreign minister Arancha Gonzalez said on Wednesday.

The Spanish government backs the issuance of European coronabonds, she added. Italy and France share the Spanish position, she said.

“What convinces markets is a solid, comprehensive response, a response on the fiscal side, response on the credit side, on liquidity side and vulnerability side,” she said in an interview with Bloomberg TV on Wednesday.

Top EU officials, including European Central Bank policymaker Carlos Costa, have argued for the issuance of common European “coronabonds” in response to the coronavirus pandemic to prevent a potential new sovereign debt crisis.

The ECB has already announced a 750 billion euro bond-buying scheme and said it considered bending the rules on fiscal discipline and state aid offered by the European Commission.

Spanish economy minister Nadia Calvino in a separate interview with Spanish radio station RNE said on Wednesday her country is urging the EU for a common and structural response.

She said Spain and its EU partners have been working on a temporary solution such as a liquidity fund available for EU member states.

“But it doesn’t seem to be, for me, the structural response we need,” Calvino said.

(Reporting by Inti Landauro; Editing by Toby Chopra)

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