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April 8, 2020, 3:08 a.m. EDT

EU finance ministers disagree on coronavirus plan

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By Laurence Norman

BRUSSELS--European Union finance ministers suspended talks on an economic crisis response on Wednesday morning, underscoring the deep differences within the bloc over how to share the mounting costs of the health crisis.

After 16 hours of talks that ran through the night, Mario Centeno, the president of the Eurogroup of finance ministers said negotiations will resume on Thursday.

"We came close to a deal but we are not there yet," he wrote on Twitter.

EU leaders last month gave finance ministers two weeks to agree to a package of measures. That timetable runs out on Thursday.

Ministers had hoped to agree to a package of measures that could have provided half a trillion euros worth of support for the economy.

That would have included offering businesses additional liquidity, helping the region's governments fund job programs and providing credit lines with relatively few strings attached to European governments that face difficulties accessing financial markets.

However, ministers were deadlocked on two main issues, according to people involved in the talks.

Italy demanded some direct commitment from its counterparts that the bloc would consider issuing common eurozone debt as part of the crisis response and recovery stage, a measure that the Netherlands, Germany and others have long resisted.

There are fears in southern countries that without common debt issuance, some of the bloc's most fragile economies will sink further into debt, which would risk entrenching a two-tier economy within the eurozone.

These countries also clashed on the conditions which would be attached to credit lines from the region's bailout funds, the European Stability Mechanism. The Netherlands is among those insisting that the ESM's support is tied to some promises for medium-term economic reform.

On Wednesday morning, German Finance Minister Olaf Scholz urged Europe to stand together.

"I therefore call on all euro countries not to refuse to resolve these difficult financial issues and to facilitate a good compromise," he said.

However, a diplomat from one of the EU countries supporting common debt issuance had a harsher take.

"As we are counting deaths by hundreds and thousands, ministers of finance are playing on words and adjectives," the diplomat said. "We will be judged severely first by the markets, then by our populations and then by other countries that will see us unable to overcome our divergence of views."

Write to Laurence Norman at laurence.norman@wsj.com

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