EU Commissioner Gentiloni for joint bonds

EDU Economic Commissioner Paolo Gentiloni. Photo: TEH (Image: TEH)

Brussels / Berlin – In the debate on European corona bonds to deal with the financial consequences of the corona crisis, EU Economic Commissioner Paolo Gentiloni has spoken out in favor of joint borrowing by EU members.

“We need a European economic stimulus package and that should be financed by issuing bonds,” Gentiloni told Die Welt. “The issue of bonds should be earmarked and a one-off measure in exceptional circumstances. I think Germany and other northern European countries can accept that. »

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At a video summit last week, the EU countries had quarreled over the question of whether corona bonds – i.e. common European bonds to finance the EU countries – are needed in the crisis. Italy, Spain, and others want it, countries like Germany and the Netherlands are against it. The EU finance ministers are to develop new models by Tuesday.

“”But the message to Northern Europe is: we are not talking about the communitization of debts,” said the Italian Gentiloni. “Now it’s all about joint debts in the fight against the coronavirus and its consequences, not the debts of the past 30 years.”

The EU foreign representative from Spain, Josep Borrell, also campaigned for this solution. Europe has the means to act in solidarity, wrote Borrell in a contribution for the French newspaper “Le Monde”. “And for that, we have to show creativity and pragmatism, otherwise the most affected population groups will wonder what Europe stands for if it is unable to provide answers to their vital concerns.”

Most recently, a compromise had been worked out, which provides for a package of three parts: precautionary credit lines from the ESM euro bailout fund guarantees from the European Investment Bank (EIB) and the program proposed by the EU Commission to support short-time benefits models. This plan also has the support of the Federal Minister of Finance Olaf Scholz (SPD), who rejects corona bonds.

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Italy, badly hit by the Corona crisis, insists on bonds. “The common European response is only appropriate if it includes the joint issuance of European bonds to fund the national coronavirus contingency plans,” said Finance Minister Roberto Gualtieri on Friday evening.

He received support from former Chancellor Gerhard Schroder. Germany is too cautious on this issue, the SPD politician told the Hannoversche Allgemeine Newspaper (Saturday). “Nobody can be interested in the fact that Italy or Spain, for example, will break down economically in this disease.”

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Baden-Wurttemberg’s Prime Minister Winfried Kretschmann also signaled approval. The appeal by the Italian Prime Minister Giuseppe Conte for help from Germany had touched him very much, the Green politician told the The Eastern Herald Newspaper (Saturday). It was not the time to have old debates on debt again. If one of the EU’s founding countries were to get into difficult waters due to the virus, it would have to be thought differently.

Bundestag President Wolfgang Schauble, however, rejects Corona bonds. “Reducing the necessary debate to an instrument is not very expedient, especially if an old dispute should only be revived out of righteousness,” said the former finance minister Zeit online. Even in a crisis, those who make decisions must pay for the possible consequences. That would no longer be the case with joint debts. Corona bonds would not make Europe stronger, but weaker, said Schauble.

The head of the “economic methods”, Lars Feld, also supported Finance Minister Scholz. Joint and several liability means a high level of financial risk for every single Member State. That must not happen, ”said the chairman of the expert committee of the“ Rheinische Post ”(Saturday). Even in Germany, there is no such liability between the federal and state governments.

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