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| - When is a fund not a fund? European officials backpedalled on Wednesday after EU Commission chief Ursula von der Leyen appeared to announce an emergency coronavirus stimulus package. Despite her declaration after talks with EU leaders, von der Leyen's spokesman played down the reach of its response to the virus outbreak, with Brussels privileging close cooperation and looser budget rules for now. With Italy under quarantine and the virus spreading havoc across the globe, markets have been roiled by the coronavirus crisis as fears of a recession take hold and calls for extra spending grow louder. After a conference call with EU leaders on Tuesday, von der Leyen said the EU would create an up to 25 billion euro fund to help member countries hit by the crisis. But an EU spokesman on Wednesday said the money would come from existing EU budget funds. "That's why we didn't call it a Corona response fund, it's an initiative," EU spokesman Eric Mamer told a news briefing. "These are not new funds. These are unused funds." In fact, von der Leyen had indeed explicitly announced a "Corona response investment fund" that would be "sizeable and reach 25 billion euros quickly" when she spoke on Tuesday night. The spending in question will come from EU subsidies left unspent due to dried-up co-financing by member states. Rules would be loosened to keep the money flowing. But EU budget firepower is very limited and any significant spending boost would have to come from member states whose finance ministers will meet on Monday to discuss the outbreak. So far, countries are going it alone, with Italy announcing 25 billion euros in emergency spending and Germany spending 12.8 billion euros. All eyes are on the European Central Bank, set to formulate its response at a policy meeting on Thursday. The EU's response is being viewed extra closely, with Europe widely seen to have fumbled its response to the financial crisis of 2008. As global banks failed, the EU's most powerful members -- led by Germany and France -- rescued their own lenders, but abandoned those on the periphery -- like Greece or Ireland -- helping spark the debt crisis. The EU has made reforms since then, including setting up a bailout fund, but an EU source said using it was not necessary for now. "Right now we are in crisis management and it isn't time to talk about fiscal stimulus, but we may get there," an EU source said. "Anyone looking for a (spending) number on Monday will be disappointed. There won't be a number. Forget about it," the source added. Instead, among other measures, finance ministers will formally waive certain spending rules for countries caught by the crisis, especially heavily-indebted Italy. arp/dc/cdw
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