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Coronavirus: EU governments bicker over ‘Corona bond’ to help pay for crisis

David Sassoli looked a little weary, and a little irritated when he sat down.

The president of the European Parliament, a man blessed with eloquence and strong opinions, had been listening to words from the leaders of the world’s most wealthy and powerful nations.

Words about co-operation; good intentions. But – clearly in the mind of Mr Sassoli, an Italian who has watched in horror as the north of his country has been devastated by the virus – the focus was still, often, just words rather than determined action.

Image: David Sassoli at a mini plenary session of European Parliament

“The instruments we have now are not enough,” he said. “This is a profound crisis. It will impact on our society, on our economy – on our very social model.

“It is not enough to just ‘open up the debate’. We need real leadership. If we weaken Europe’s internal market, we weaken every country including those we think they are stronger than the others.”


As he spoke, the leaders of the 27 countries that make up the European Union, as well as the presidents of the European Commission and European Central Bank, were holding a video conference to discuss their response to the crisis. It was a show of political strength, and it was intended to also be a show of European unity.

The leaders agreed, of course, to endorse such measures as joint procurement of equipment, relaxations on state aid and greater investment into vaccine research.

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But then came the crack. How to pay for all this? How to structure debt? Do you increase the overall budget of the EU, or create a centralised facility, or just leave it on the shoulders of each country?

Image: A picture shows a screen of a video conference call between members of the European Council on Thursday Coronavirus: Half a million COVID-19 cases confirmed worldwide

At the heart of this is the idea of creating a form of debt that would be known as a “Corona bond” to help finance Europe’s response. I understand that the German and Dutch governments oppose the idea; Italy and Spain, the two European countries most severely affected, don’t just support it, but see it as a test of the EU’s commitment to them.

The meeting went on for hours. Diplomats talked of angry exchanges, of Spanish Prime Minister Pedro Sanchez saying that the “European project” is at stake. Even German Chancellor Angela Merkel admitting that the arguments were damaging to the fabric of Europe. So, too, did the French president, Emmanuel Macron.

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And the answer? Well, there isn’t one yet. Instead, the group of European finance ministers, known as Eurogroup, have been given 15 days to come up with some proposals.

In normal times, 15 days would seem reasonable. The European Union isn’t known for rushing headlong into big decisions. But two weeks, in the midst of a pandemic, will stretch painfully into the future.

The repercussions could be significant. Italy was already a country where euroscepticism rang loud. The idea that the EU has hesitated in backing Italy, at its hour of profound need, could inspire those doubts further. The same, perhaps, could happen in Spain.

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It is far too early to talk of the EU breaking up. It has survived crises before (although none like this) and it is much more likely to adapt than to collapse.

But for all the proclamations about unity that have come from the European Commission, the political response so far has been dominated by governments pursuing their own paths, rather than acting as part of a collective.

Mr Sassoli said that “governments who try selfishness as an answer,” must understand that “a stronger EU will allow our countries to recover”.

In Europe, there are now politicians – experienced, sanguine politicians – using combative, confrontational language. The political effects of this virus could be profound.


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