Berlin, 6 April 2020 (dpa/MIA) – Two senior Germany government ministers called on Monday for collective European Union measures to be used in the fight against the new coronavirus.
EU member states are at odds over how much fiscal firepower to use to cushion the economic blow of the pandemic, with finance ministers due to revisit the issue on Tuesday.
In a guest article published in several European newspapers, Foreign Minister Heiko Maas and Finance Minister Olaf Scholz said joint EU initiatives – such as the European Stability Mechanism (ESM) bailout fund and the European Investment Bank – could be used to mitigate the impact of the pandemic.
But they did not mention so-called coronabonds, which the German government has so far rejected.
Italy, Spain and France in particular have called for the introduction of a collective debt instrument, which would allow them to receive fresh money from investors under significantly more favourable conditions.
“European solidarity is not a one-way street, but a life insurance policy for our continent,” Maas and Scholz wrote in the article.
“It is now Europe’s common task to buttress the existing programmes, fill the gaps and to span a safety net for all EU states that need further support.”
The ESM already allows “eurozone countries to borrow capital together on the same favourable conditions,” the ministers wrote.
“For Italy, this would mean a fresh injection of 39 billion euros [42.2 billion dollars], and for Spain, 28 billion euros [30.3 billion dollars].”
The ministers backed the idea of a “pan-European guarantee fund” providing liquidity to small- and medium-sized businesses, as well as financial support for EU members via the SURE (Support Mitigating Unemployment Risks In Emergency) initiative proposed by the European Commission last week.