July 12, 2020

Sánchez clings to the “coronabonos” before the lack of control of the crisis


MADRID

Updated:

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While Spain surpasses China in death toll from the coronavirus and looks out on a economic recession of unknown but overwhelming dimensions, the only possible salvation seems to be in Europe. The president of the Government, Pedro Sánchez, yesterday intensified the request for community aid and asked Brussels for evidence of “real commitment, forcefulness and solidarity”. As he alleged, Europe “is at stake” and “this time it cannot fail.”

Pedro Sánchez’s message comes after the fiasco of the meeting of the Eurogroup last Thursday, in which the Netherlands and Germany ended up putting foot on the wall to the requests of some countries, including Spain, requesting the implementation of a common debt instrument, which colloquially have come to be called “Coronabonos” and that Sánchez renamed yesterday as “reconstruction bonds”, in order to finance the enormous expenses that the Covid-1 coronavirus pandemic9.

“Even the most Europeanist countries need proof of real commitment from the European Union, which listens and acts, but we ask for forcefulness and solidarity,” Sánchez said yesterday during his appearance in La Moncloa. And is that gap between north and south of the Old Continent only relives the ghosts of the 2008 crisis, when Germany blocked the possibility of issuing joint debt even in the most difficult moments of the euro crisis. The “ant” countries did not want then to finance the “cicada” party. And they also don’t seem to be willing to share expenses now.

At least not in the conditions in which Spain currently requires. According to Sánchez yesterday, different types of measures are demanded from Europe, aimed at combat the coronavirus health emergency, coordination to ensure the repatriation of compatriots and also common cybersecurity, “so the response must be united in the face of the current catastrophe.” In addition, it is asked to raise “a war economy and promote resistance with public debt measures.” It is that Sánchez has called a “new Marshall Plan”, which “must have the support of all European organizations,” he said.

However, both Germany and the Netherlands have already shown Spain the way and it passes, in his opinion, through the appeal to the Rescue Fund. Something to which the President has again denied today: “We must mutualize that debt among all”, so that “the reconstruction bonds have the shelter, the protection and the solidarity of the whole of Europe”. The problem is to define what concepts could be financed through this common debt role. And that not all countries have approved the same social coverage networks, nor do they have the same health structure.

Be that as it may, Sánchez also tried yesterday to mutualize the health crisis with the rest of the European partners. As in previous appearances, the President highlighted the “global” dimension of the coronavirus pandemic which, he said, is “symmetrical” and “does not respect borders or distinguish between States.” And he assured that all countries, “regardless of their economic situation”, must face “the same realities and shortages”, such as when it comes to “purchasing materials such as masks, gowns and gloves. “None of us had the magnitude of the challenge in mind, nor did we have the necessary resources,” he acknowledged.

Reason in negotiations with Europe is now more important than ever. Our country is among the most indebted of the euro, which may pose a problem in the future to finance the expenses derived from the Covid-19 virus pandemic. And the Spanish economy, based on services and tourism, and with a large percentage of SMEs, will suffer the impact with particular force. But, in addition, the management of the health crisis has put Spain in the world focus, with the associated risk of reliving a reputational crisis that would now be fatal.

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