European Union leaders have agreed on a co-ordinated approach for the procurement of medicines, medical devices and protective equipment, including establishing an inventory of stock and production capacity so health services are prepared for the number of Covid-19 cases as they continue to increase.

The leaders held emergency talks by video conference today as they scrambled to coordinate a Europe-wide response to the coronavirus epidemic, which has roiled markets and put Italy on lockdown.

As some Asian nations voiced hope their outbreaks were abating, the virus still appears to be on the up in Europe.

Taoiseach Leo Varadkar said that while health and human life are the overriding concerns, the EU leaders also considered the potential economic impact of this crises which could be severe and long lasting.

He said they agreed that the necessary flexibilities would be made available; state aids, stability and growth pact to protect the most exposed sectors, including SMEs and jobs.

The leaders have agreed that in order to ensure a more co-ordinated approach at EU level, health and other relevant ministers should now talk to each other daily.

The Taoiseach welcomed the European Commission's announcement that would bring forward legislation to protect airline landing slots where flights are stopped from the most affected areas.

Italy - the worst affected country outside China - has been forced to take drastic measures to try to slow the spread of the disease.

Ahead of the video summit of the 27 leaders, the European Commission praised Italy for taking "bold" steps to counter Covid-19, which include telling its 60 million citizens to stay at home and travel only for the most urgent health or work reasons.

Business and markets

EU leaders have also sought to reassure business and markets they will do what it takes to protect the bloc's economy from the effects of the deadly coronavirus epidemic.

After EU officials' video conference on the crisis, EU Commission President Ursula von der Leyen announced an investment fund of up to €25 billion to support healthcare, jobs and small businesses.

"We'll set up a task force to work with the member states to ensure that the money starts flowing in the coming weeks," she said, vowing to seek to release €7.5 billion this week.

"We will use all funds at our disposal so that the economy in the EU resists and is resilient. We will be using all of our means so that our economy can weather the storm."

The eurogroup - finance ministers from the 19-member single currency bloc - is to meet on Monday, and Ms von der Leyen said Brussels would have propositions for them.

She said that state aid must be allowed to flow to countries that needed it and that Europe should make use of "flexibility" in its rules limiting public deficits.

This suggests Brussels will look the other way if member states boost public spending to overcome a slowdown caused by the virus, even if states breach budget guidelines.

"On both of these fronts, we will clarify the rules for the game for Member States very quickly. There will be guidelines by the end of the week," she said.

'Bad decisions'

Aside from the economic impact of the novel coronavirus, the leaders agreed to coordinate their public health responses better, after wrangling over medical supplies.

"Health ministers and interior ministers should consult daily to ensure proper coordination," European Council president and host of the tele-summit Charles Michel said.

The EU chiefs said the commission would coordinate supplies of such things as masks and respirators. France and Germany have been criticised for preventing their export.

France's President Emmanuel Macron welcomed "the indispensable measures" to shore up the economy, but broke the united front to criticise Slovenia and Austrian for closing their Italian borders.

"I sincerely believe that these are bad decisions," he said, adding that France does not yet see a need to impose a nationwide stay-at-home order like neighbouring Italy.

"The goal is and the most important part right now is to slow down the spread," Ms von der Leyen said.

"So, to prolong the time before infection takes place ... because if there are too many infections in too short time, it is a huge strain for the health sector mainly for the ICUs," or intensive-care units.

European Central Bank chief Christine Lagarde joined the talks, as the EU mulls what financial interventions might be needed, after markets plunged on Monday, suffering their biggest one-day losses in more than a decade.

Mr Michel also said that despite what he saw as the success of the video conference format and the cancellation of many events across the globe, he expects the 26/27 March European summit to go ahead.

European Parliament president self-isolates

The European Parliament today heard calls for European Institutions to develop a common strategy to fight the spread of coronavirus.

The virus hit the heart of politics in Europe this week with the parliament sitting for just one day instead of four due to concerns over the virus.

It was also held in Brussels instead of Strasbourg in France, where it sits once a month, in an effort to stem the spread.

The President of the Parliament David Sassoli opted to self-isolate at his home in Brussels after returning from Italy.

During the plenary session today the EU's Commissioner for Health and Food Safety, Stella Kyriakides, urged EU countries to focus on efforts contain the virus.

"I agree with what many of you said that containment is key at this point. There are many unpleasant measures that have had to be taken but these are important in order to slow down the spread and save lives."

Italian MEP Nicola Danti highlighted the need for EU solidarity and for more funds to be put into researching the virus.

"The European institutions must develop a common strategy to fight the spread and to ensure a rapid resupply of medical materials for therapy and also finance research into a vaccination to stop the virus."

Green Party MEP Grace O'Sullivan said that as anxiety grows ambitious, far-reaching leadership is needed from the EU.

Other MEPs, including Fine Gael MEP Sean Kelly, were critical of the EU's response to the virus.

He said: "I think it's fair criticism to say that the European Union has been slow to react and now it needs to get its act together and bring all the countries together to deal with this as quickly as possible."

The European Commissioner for Crisis Management, Janez Lenarčič, said as the virus continues to spread member states and EU institutions need to step up their actions.

"Not everyone is affected in the same way at the moment, there are some who are hit harder.

"That is why we stress the need for solidarity among EU member states in particular because without solidarity the mechanisms that we have simply do not work."

As the virus sweeps across the European Union, officials will be hoping efforts to contain it will be successful sooner rather than later.

Additional reporting Aisling Kenny