The southern offensive continues Europe to get a mutualization of the debt to face the economic consequences of this crisis. In a letter addressed to the President of the European Council, Charles Michel, the Spanish president, Pedro Sánchez, and eight other European prime ministers call for the issuance of wreaths, to ensure the long-term financing of the policies necessary to counteract the pandemic
They argue the need for this instrument since “a symmetrical external shock is being faced, for which no country has responsibility, but whose negative consequences are borne by all.” Specifically, what they are asking for is “a common debt instrument issued by a European institution to raise funds on the market, on the same basis and to benefit all member states.”
The signatories speak of an “external shock” with negative consequences for all
The letter is sent with tomorrow’s European Council in mind, as heads of government will debate the responses to this crisis. It is signed by eight countries, but the majority from the south, those that have always pressed for the idea of Eurobonds; among which are, in addition to Spain, France, Italy, Portugal, Belgium, Greece, Luxembourg, Slovenia and Ireland.
In the previous crisis, Germany and the Netherlands flatly refused to contemplate any mutualization of the debt. In the current one, despite the differences and their symmetrical nature, Berlin and The Hague also continue to resist.
In the Eurogroup held yesterday, the president of the European Central Bank (ECB), Chistine Lagarde raised the issue of joint debt as an exceptional measure, according to the Reuters agency; but he met with the opposition of the regulars, Germany and Holland.
If the shock is assured in eurobonds, more progress has been made in other aid formulas, certainly much less forceful, such as the involvement of the European rescue fund (ESM) to open credit lines worth up to 2% of the GDP of the countries that require it. In the Eurogroup there was a broad consensus to activate it, although not a definitive agreement, which the heads of government will have to take and specify the conditions under which these credits would be granted.