The coronavirus pandemic is likely to lead to a significant recession throughout Europe, with all countries spending more money than they can generate. Despite EU Commission President Ursula von der Leyen urging member states to “invest whatever is necessary to have the economy going further”, last week the bloc failed to reach a compromise on debt-sharing for the fourth time in a row. Nine EU countries – Spain, Italy, France, Belgium, Luxembourg, Ireland, Portugal, Greece and Slovenia – are urging Brussels to issue eurobonds, otherwise called ‘coronabonds’ – a common debt instrument aimed at raising funds on the market.
However, Germany, the Netherlands, Australia and Finland are heavily opposed to the measure and resisting the calls.
They see it as potentially putting their taxpayers on the hook for the debt of other countries.
Both tend to have conservative fiscal policies, with low debt and low deficits, and argue that other pre-existing eurozone tools should be used to overcome the COVID-19 outbreak.
They also worry that coronabonds could be the thin end of the wedge towards making all eurozone debt mutually held, something which they also resisted during the global financial and eurozone crisis.
In an interview with Express.co.uk, Italian MEP Antonio Maria Rinaldi claimed the EU, now more than ever, misses Brexit Party leader Nigel Farage.