"The shock is temporary, but we must work together to ensure that it is as short, and as limited as possible," EU Commission chief Ursula von der Leyen said during a press conference.
"Therefore member states should be encouraged and they should feel comfortable to take all the necessary measures to support the most effective sectors."
Italy is the EU member state hit hardest by the virus, with 17,660 cases and 1,266 dead, followed by Spain with 2,965 cases with 84 dead, France with 2281 cases and 48 dead (March 11 figures) and Germany with 2,369 cases and 3 dead. Worldwide, there are now 134,496 cases and 5,052 dead. China, where the virus originated currently counts 8,813 cases (3,176 dead) but the Chinese National Health Commission reports that 64,111 have recovered before being released from hospital.
The European Commission, the EU's executive arm, has limited firepower to fight an economic downturn, with loosening public spending rules its most powerful tool.
"What we need now is to use flexibility within EU fiscal rules to allow member states to fully respond to the crisis," said EU executive vice president Valdis Dombrovskis.
The message was meant for heavily-indebted Italy, which has announced 25 billion euros in emergency spending, technically violating EU debt and deficit rules.
Von der Leyen also boosted the amount of existing EU budget money to be devoted to the crisis to 37 billion euros.
The spending in question will come from EU subsidies left unspent and rules will be loosened to keep funds flowing.
All eyes are on a meeting Monday of EU finance ministers who between them have more power to build a response sizeable enough to be felt on the markets.
The situation was made more urgent after Christine Lagarde, the European Central Bank chief, spooked markets by saying that managing Italy's public borrowing capacity was not a priority.
Border checks
Meanwhile, van der Leyen was careful in elaborating on possible inter-EU travel bans and increased border checks to fight the virus.
"Certain controls may be justified, but general travel bans are not seen as being the most effective by the World Health Organization," von der Leyen said, calling instead for health screening at borders.
Such tests could be carried out either at borders or within member state territories, she said.
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