European finance ministers have reached a deal on a €540bn package of financial help for countries, companies and workers hit by the coronavirus crisis, in what Dutch finance minister Wopke Hoekstra says is a ‘powerful sign’ of EU solidarity.

The deal includes €240bn from the European Stability Mechanism fund to pay for the medical and economic consequences of the pandemic, €200bn in company credit via the European investment bank and a €100bn fund to pay for shorter working.

The deal also appears to indicate that the EU will not issue euro or coronabonds, which both the Netherlands and Germany oppose, and which are seen as a way of pooling the cost of economic recovery.

Both Italy and the Netherlands, which had been at loggerheads about both coronabonds and use of the ESM, have made compromises to ensure a deal was reached, insiders say.

The Netherlands had said it would only support use of the ESM if countries then pledged to reform their economies. That requirement will now apply to loans made to shore up struggling economies but not loans for medical costs.

‘With this package we will help countries in need in the short term while also building resilient economies on the long-term,’ Hoekstra said on Twitter. ‘This is a powerful and sensible sign of European solidarity.’

1/6 After long and intense conversations the last couple of days, the #Eurogroup came to a good conclusion today. We made sensible agreements together for Europe and the NL to face the #coronacrisis. pic.twitter.com/2u33trWJgp

— Wopke Hoekstra (@WBHoekstra) April 9, 2020

Eurogroup president Mário Centeno said in a statement after the video conference that the agreement shows ‘we have the political will and flexibility to take the instruments we created during the last crisis – in this case the ESM – and make them relevant and appropriate for the current crisis.’

Eurozone countries have also agreed to work on a recovery fund, which, Centeno said, ‘would turbo-charge the European investments that we will need to build a better, greener, more resilient and more digital economy.’