The European Union will launch a €37 billion investment initiative as part of a package of measures to cushion the bloc's economies from the impact of coronavirus, European Commission President Ursula von der Leyen said. 

Other steps the EU's executive will take include giving member states flexibility on budget deficits and state aid, von der Leyen told a news conference.

The move is meant to grant full spending flexibility to Italy, the European country so far most affected by the crisis. 

The EU will also use €1 billion of EU money to guarantee up to €8 billion in loans to 100,000 virus-hit firms in tourism, retail, transport and other ailing sectors, von der Leyen said. 

"I am convinced that the European Union can withstand this shock," she said. 

"But each member state needs to live up to its full responsibility and the European Union as a whole needs to be determined, coordinated and united," she added. 

Von der Leyen did not provide details on where the pledged money would come from. 

Earlier this week she announced a €25 billion investment plan based exclusively on existing EU funds already committed to EU states.

Meanwhile, the European Commission is ready to activate a clause in EU fiscal rules that would allow a suspension of budget commitments by countries most affected by the coronavirus crisis, the EU executive's vice president said today. 

"We stand ready to activate the general escape clause to accommodate a more general fiscal policy support," Valdis Dombrovskis told a news conference. 

"This clause would suspend the fiscal adjustment recommended" and can be triggered in case of a severe downturn, Dombrovskis said.