As Europe sorts through its choices of economic weapons against the threat of a coronavirus depression, corona bonds are languishing near the bottom of the stockpile.

EU treasuries are instead leaning toward credit lines for governments, jobless reinsurance and a European Investment Bank loan program to help pump money into economies crippled by the pandemic.

While there's no consensus, most of the bloc converged around the three-pronged plan during a teleconference of deputy finance ministers Wednesday evening, four diplomats on the call told POLITICO.

The ministries are preparing a roster of possible EU measures intended to support national efforts to keep companies and consumers afloat after virus containment efforts have shuttered trade and storefronts around the bloc.

Topping the list is a plan — a draft of which POLITICO has obtained — to offer credit lines that eurozone governments could draw from the currency club’s bailout fund, the European Stability Mechanism.

While that compromise remains uncertain, the ESM credit lines have garnered the broadest support in the behind-the-scenes talks because they already exist.

Invoking the ESM has generated resistance from Italy and other countries, partly out of concern that tapping the rescue fund would set off another sovereign-debt crisis in markets. The opponents also won't accept the usual conditions attached to its aid programs, including budget cuts and economic restructuring.

The plan under consideration would lighten those conditions, merely insisting that the governments' finances look to be in healthy long-term shape. The funds also would be limited to spending on coronavirus health care and economic costs.

While that compromise remains uncertain, the ESM credit lines have garnered the broadest support in the behind-the-scenes talks because they already exist — as opposed to the other options.

At the bottom, according to the diplomats in the talks, is the call from nine countries including Italy and Spain for a novel form of pooled EU debt in the form of corona bonds.

Ranking in the middle are the European Commission's jobless reinsurance proposal and the European Investment Bank's plan to generate €200 billion in guaranteed loans for companies in need.

EU finance ministers will discuss the options next Tuesday before handing the final decision to their leaders.

No guarantees

The Commission made a splash with its €100 billion reinsurance proposal on Thursday, but the plan faces doubts.

Germany expressed support for Commission President Ursula von der Leyen's initiative — with a caveat.

A German official said it was “an interesting proposal” that Berlin would consider with “goodwill.”

But Eckhardt Rehberg, budget spokesperson for Chancellor Angela Merkel’s conservative parliamentary group, cautioned that it must remain “a temporary crisis instrument that can only be used now in the acute corona crisis,” limited to the end of the year.

Rehberg also sought to preempt a further move by demanding that the instrument should not “create a precedent for the establishment of permanent unemployment reinsurance.”

Some European treasuries are meanwhile quietly raising concerns about the €50 billion of guarantees that the EU's executive arm and the EIB are seeking in their proposals.

Guarantees are an easier ask than cash from governments already overburdened with health-care costs and efforts to spur their economies, as von der Leyen emphasized in presenting her plan, dubbed SURE. Still, the promises remain a potential liability for the state.

Both the Commission's unemployment aid and the EIB's €200 billion loan-guarantee fund come with requests for €25 billion in guarantees from national capitals — and the EIB wants its half by April 10, according to a document the Luxembourg-based lender sent to finance ministry officials in the discussions.

“Politically, you can’t be against [SURE], but the guarantees are adding up — even if the Commission doesn’t think they’ll ever be needed,” said one of the doubtful diplomats in the talks. “We’ll have to see what happens.”

Bonds broken

The EU efforts come on top of national stimulus packages amounting to hundreds of billions of euros, amid fears of a €1 trillion economic hit from an outbreak that worldwide has left 50,000 dead, including more than 13,000 in Italy and 10,000 in Spain.

Whatever their eventual choice of instrument, the EU governments have signaled urgency by giving their finance ministers just two weeks to present options, after a previous summit meeting yielded only acrimony.

“Insisting on eurobonds or corona bonds, whatever you want to call them, will not lead to a quick agreement.” — Michael Hager, chief of staff to Executive Vice President Valdis Dombrovskis

Those talks broke up with Southern European governments repeatedly calling for corona bonds to show solidarity.

The appeal has fallen on deaf ears in Berlin and The Hague, despite France’s efforts to revamp the controversial initiative as a fund, in a document circulated among finance ministries around Europe.

Dutch Prime Minister Mark Rutte has countered with his own proposal, for one-off transfers worth €10 billion to €20 billion to countries hit worst by the coronavirus epidemic. The idea failed to get much traction Wednesday, the diplomats in the talks said.

The Commission is pushing its SURE jobless program along with extra budgetary firepower because the novel debt instruments are so unlikely to find a consensus, a senior official said Thursday.

“The debate has already become very entrenched,” said Michael Hager, chief of staff to Executive Vice President Valdis Dombrovskis and also the most senior German among aides at the Commission's headquarters. “Insisting on eurobonds or corona bonds, whatever you want to call them, will not lead to a quick agreement.”

Hans von der Burchard and Paola Tamma contributed reporting.