Coronavirus: The EU Arrives Divided At The Top, Clash On The Coronabond

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Today videoconference at 27. On the one hand Italy, France, Spain and other countries, especially in the south, are asking for a massive intervention in Brussels given the extraordinary nature of the moment. On the other, the northern block, led by Germany and Holland, forms a wall. Gualtieri: The EU shares the risks, common bonds are needed.

The European Union arrives divided at the crucial appointment. In the most dramatic hour of the coronavirus explosion, the 27 are at the top that should have given a unitary response to stem the economic consequences of the pandemic in two opposing blocs. On the one hand, Italy, France, Spain and other countries, especially in the south, which are calling for massive Brussels intervention given the extraordinary nature of the moment. On the other, the northern block, led by Germany and Holland, which form a wall. There are basically two points on which an agreement is distant: the conditions to be applied to a possible intervention by the Save-States Fund and the possibility of introducing debt securities guaranteed by the EU, the Eurobonds. On both issues the two fronts are far apart.

Mes also slips

The divisions between Member States have forced the President of the European Council, Charles Michel, to present a new draft of conclusions further watered down compared to the previous version which gave a substantial go-ahead to the use of the Mes.

This morning at a meeting of Coreper (the body that brings together the ambassadors), the Netherlands and Finland opposed a paragraph asking the Eurogroup to conclude technical work to activate the credit lines of the European Stability Mechanism within the next week. In the latest draft which was circulated among the capitals, the European Council invites the Eurogroup to “develop the necessary technical specifications” to activate the Mes “in the coming weeks”. In the new draft, as in the first, there are no explicit references to the possibility of introducing Coronabonds.

Meanwhile, in the aftermath of the words of Mario Draghi who from the columns of the Financial Times spoke of the coronavirus and its consequences on the economy as a “tragedy of biblical proportions”, a strong appeal came from the President of the European Commission, Ursula von der Leyen. The head of the EU executive, in the practically deserted hall of the European Parliament (the vast majority of MEPs attended the plenary session from home) accused some member states of selfishness. “The last few weeks tell us a painful story at times – said von der Leyen – when Europe really needed us to be with each other, too many initially only cared about themselves. When Europe really had need the spirit to be “all for one”, too many replied “just for myself”. And when Europe really needed to show that this Union does not exist only when everything is going well, too many initially refused to share what they had.”

Attention is now focused on Germany: Berlin in recent days, under the voice of the Minister of Economy, Peter Altmeier, has demolished the Italian proposal on coronabonds and has shown a lot of shyness on the use of the Save States Fund without conditionality. Only a change decided by Angela Merkel could unlock the situation and allow the EU to get out of the impasse.

Gualtieri: the EU shares the risks, common bonds are needed

“Faced with a symmetrical shock, to maximize the effectiveness of these interventions and ensure cohesion and convergence between countries, they should be supported by full risk sharing, also through issue of common debt instruments “. This was stated by the Minister of Economy, Roberto Gualtieri, The ECB’s initiatives in this context are very positive, stressing that “the ECB’s initiatives in this context are very positive”.

“With the measures already adopted and those in preparation we are launching an unprecedented support for liquidity based on public guarantees and which is at the level of the most substantial and ambitious initiatives put in place in Europe”, the Minister of Economy claims, in about the interventions to face the economic emergency triggered by the pandemic. Gualtieri quotes the ex-president of the ECB, Mario Draghi, who in the Financial Times spoke of a “war” that needs adequate measures , including a “significant” increase in the public debt of states.

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