BRUSSELS — The European Union's finance ministers have reached a deal on a 5oo billion-euro ($540) rescue plan to support the economies of the coronavirus-hit member states.

The rescue package was approved by the he Eurogroup, which consists of 19 finance ministers representing the EU's eurozone countries, on Thursday after the Netherlands backtracked on its demand for economic reform and oversight.

The chairman of the Eurogroup, Mário Centeno, announced the deal, reached after marathon discussions in Brussels.

"Today, we agreed upon three safety nets and a plan for the recovery, to ensure we grow together, not apart, once the virus is behind us," Centeno said in a video statement following the agreement. "These proposals build on our collective financial strength and European solidarity."

The key feature of the rescue package involves the European Stability Mechanism, a bailout fund that was created during the EU's eurozone debt crisis. The ESM would make 240 billion euros ($261 billion) available for indebted countries.

Dutch Finance Minister Wopke Hoekstra called it "a sensible agreement" for Europe. "The ESM can provide financial help to countries without conditions for medical expenses," he said on Twitter. "It will also (be) available for economic support, but with conditions. That's fair and reasonable."

The aid comes as Spain's prime minister said the country was close to passing the worst of its coronavirus outbreak.

Spain has Europe's highest number of confirmed cases, with 152,446. More than 15,000 people have died.

The head of the International Monetary Fund (IMF) has warned the world is facing the worst economic crisis since the Great Depression of the 1930s.

At their Brussels talks, EU ministers failed to accept a demand from France and Italy to share out the cost of the crisis by issuing so-called coronabonds.

The package finally agreed is smaller than the European Central Bank (ECB) had urged.

The ECB has said the bloc may need up to €1.5tn (£1.3tn) to tackle the crisis.

However, French Finance Minister Bruno Le Maire hailed the agreement as the most important economic plan in EU history.

"Europe has decided and is ready to meet the gravity of the crisis," he tweeted after the talks. — Agencies