EU in tug of war over corona aid

The best argument for common bonds is not that they would help Italy but that they would help all states, financial expert Alessandro Penati clarifies in La Repubblica:

“Italy is rightly calling for shared bonds with long-term mutualisation of debt, because increasing the sustainability of its debt would reduce the risk of a crisis, and that would also benefit Germany. In return, however, Italy must provide concrete proof that it is serious about wanting to reduce its excessive debt - proof that the country has not furnished for at least ten years. And it should not try to secure financial aid in the name of European solidarity, a concept that is now more abstract than ever, but in the name of everyone's economic interests.”

The resistance to Eurobonds is also due to the fact that this form of solidarity with other countries is less easy to disguise, observes Helsingin Sanomat:

“The resistance of the northern countries is not consistent on some points. Many of the solutions for defusing crises already involve extending joint liability. Finland's liability, for example, would increase through the 100-billion-euro employment fund developed by the Commission, because it requires Finland to guarantee loans offered by the fund. However, there is less resistance to this than to Eurobonds, because in the domestic political debates within the individual member states these bonds will be harder to conceal than other solutions that expand shared liability.”

La Repubblica doubts very much that an agreement will be reached on Thursday:

“The veto is hovering over the negotiating table. Italy, France and a dozen allies are blocking the finance ministers' final document. Eurobonds remain the sticking point. Rome and Paris won't be satisfied with the creation of a new stimulus fund. They want an explicit guarantee for the issue of joint European bonds. So the negotiations continue. But the EU is so shaky right now that Giuseppe Conte and Emmanuel Macron have even advised against presenting a 'recovery plan' and the EU health exit strategy announced by Ursula von der Leyen, after which the president of the Commission cancelled her press conference on the issue.”

It's about time the EU took resolute steps to help the worst hit countries, Politiken urges:

“The EU doesn't have any powers to speak of in the healthcare sector, some might say. That's true, but the corona crisis is at least as much an economic crisis as it is a health crisis. And when it comes to the economy, the EU has considerable room to manoeuvre. ... Germany and the Netherlands categorically reject eurobonds. And not without reason, as they fear they'll have to foot the bill for the more frivolous economic policies of the countries to the south. ... But in times like these, the EU must lend a hand and prove its worth. As France's Finance Minister Bruno Le Maire put it at a recent EU summit, 'The basic question is simple: do we stand together or not?' This question should answer itself.”

Now integrity means ignoring regulations, writes Alexander Soros, Deputy Chair of the Open Society Foundations, in Krytyka Polityczna:

“The European Union has a duty to its member states and its citizens to use all available financial instruments or create new ones to ensure that both Italy and the integrity of the community survive the crisis and then recover from it. This will require that the Union stops relying, as it has done until now, on an outdated model of government based on the lack of common financial resources in the monetary union. If Italy falls, the cost for the European economy - indeed, for the European project as a whole - will be much higher than the cost of violating the odd budgetary rule in a time of serious danger.”

Former Hungarian justice minister in the Orbán Cabinet (2014-2019) and current MEP László Trócsányi writes in La Libre Belgique that Europe can finally show its true purpose:

“Europe has never been as united in solidarity as it is now. ... The management of this health crisis may not be perfect, but nations, regional players (such as the EU) and global actors (such as the WHO) are working together. ... This is a very different approach from that in China, Iran, the US. ... In order to combat its weaknesses, the EU must emphasise the 'European identity', that is, an identity with which all European citizens can identify. Promoting such an identity and 'lifestyle' is essential in order to strengthen the feeling of belonging to a common European Family, and to successfully overcome the difficulties we face.”

Italy's fixation on Eurobonds is ill-advised, warns economist Lucrezia Reichlin in Corriere della Sera:

“Italy is making a mistake by clearly rejecting the use of the ESM [European Stability Mechnism] instrument from the outset and putting all its efforts into coronabonds. The reason is obvious: we must now discuss several instruments and not focus solely on one super weapon. The objectives that Europe must pursue in order to combat this crisis are different, and so the ways and means must also be diverse.”

Generousness and a good name for the aid programme are needed now, urges Deutschlandfunk:

“The help from the ESM would have to be allocated without most of the conditions that otherwise apply. Access to money must be made easier and quicker, because it wasn't faulty economic policy but a virus that has left Italy and Spain so badly affected by the corona crisis. Germany must not emerge from the crisis as Europe's accountant. What's called for now is a well-put-together aid fund endowed with hundreds of billions of euros. And rather than stipulating fiscal policy for years to come, it should generously provide all the aid needed in the current emergency. And then there's something the technocracy-prone Germans tend to forget: this large-scale relief operation should have a name that takes account of previous emotions and inspires new ones. Why not the 'Corona Marshall Plan'?”

The EU must abandon the austerity mentality of the last crisis if it wants to avoid fuelling further anti-European sentiment, Kathimerini warns:

“The idea of a joint borrowing tool to help Europe get back on its feet and reboot the economies of its member-states after the devastating impact of the coronavirus pandemic is extremely important. However, if the discussion on the European Stability Mechanism's credit lines is conducted in a spirit of moral indignation and coloured by the mood from the previous financial crisis, this will simply serve to stoke the destructive forces of Euroscepticism. It will make the European Union appear driven by selfish motivations, even in the face of this unpredictable and universal threat. Europe needs more than liquidity; it needs to confirm that its founding principles can survive this ordeal.”

It's worth taking a closer look in this discussion, Der Nordschleswiger believes:

“Because the truth is that there is still European solidarity despite everything. Countries are taking in patients from other countries, materials are being donated, joint orders are being placed, the import and export of food and medical goods has been secured, money for research on corona vaccines has been jointly allocated, exemptions have been granted for economic support and subsidies, members are being allowed to incur more debt than usual, a huge rescue package has been put together, and the stability mechanism that emerged from the financial crisis is to be implemented. ... Perhaps the EU is not the loudest voice in the crisis. But it is functioning reasonably effectively within the framework permitted by national governments.”

El Periódico de Catalunya also warns against rash decisions:

“European solidarity, yes or no? Wrong debate. The support is there, even if Germans, Spaniards or Italians don't see it that way. But it's up to the politicians, especially in Spain and Italy, to explain to citizens how this support is organised. Reducing the debate to corona bonds is not only unfair on the central Europeans who share the risks via the ECB, it also fuels anti-European sentiment. ... Europe may not be all we expected it to be, but we are not being left to face the epidemic alone. The ECB's help in the 2010-2012 crisis was invaluable, and it will continue to be so in the current crisis and in the future.”

The EU will be different after this crisis, Dejan Steinbuch writes on the news website Portal Plus:

“The coronavirus pandemic has shaken the foundations of the European Union to such an extent that even once the virus is under control I don't believe it will ever be as beautiful as it used to be. Perhaps the EU will retain some freedoms, and I'm sure it will maintain the full liberalisation of the economy and tariffs, but politically speaking such a union of countries has no chance without a fundamental change. Perhaps the British, in their inexplicable way, realised this years ago when they said goodbye to Brussels. Be that as it may, the current EU Commission doesn't inspire the faintest hope that at the end of the corona war everything will be the same.”

Many states are currently putting their own interests first, but they'll soon see they're on the wrong track, De Standaard points out:

“Europe was beautiful when we could still ski. But now that our lives are in danger the borders must be closed immediately. National self-interest is now the only legitimate motivation. That holds for protective masks, bank dividends and European billions. ... But very soon the narrow confines of our national borders will turn out to be hopelessly inadequate. The EU will get a second chance. Everyone will have to suffer - including the Dutch. Corona will cause states much economic and financial hardship, and the EU will prove indispensable. ”

The fact that the key principles of open borders, freedom of movement and the Stability Pact have all been suspended highlights the existential crisis of the EU, The Spectator observes:

“A further example of the damage to the European project wrought by the epidemic is the break-down of European solidarity. Never a perfect concept in the first place, that solidarity under crisis is patently ceding to nation state reflexes. … What is certain is that some European political parties will be boosted electorally by Europe's feebleness in the crisis. Both Matteo Salvini in Italy and Marine Le Pen in France excoriated Brussels weeks ago for refusing to lift the Schengen agreements to stop the virus spreading ... The forced suspension of many of the EU's fundamental principles is a gift to them. Brussels will struggle to put the genie back in the bottle.”

The pandemic has shown that Europe does not want to be united, writes Lietuvos rytas:

“It is becoming increasingly clear that as soon as we encounter a real threat all the fine talk about common values and solidarity gives way to specific interests and pragmatism, or plain selfishness. I predict that even if the belief in common values does not disappear, many things will be shattered against the hard factual reality. ... The United States of Europe will probably remain just a literary dream of Churchill's. His country was the first to reject the idea. And if the so-called hard EU integration should take place after all, what would it look like in these times? Like Macron's curfew?”

Tygodnik Powszechny doesn't agree with those who fear that the European project will fail because of the pandemic:

“If the current crisis can lead us to draw one conclusion about the future of the EU, it is this: we need a new political agreement in Europe that clearly defines what we can expect from EU institutions on the one hand, and from national institutions on the other. If the expected economic collapse materialises, we will once again be disappointed that our narrative of the EU does not coincide with the EU that actually exists. But this sense of dissonance will always be smaller than what the Chinese or Russians feel when listening to their own national narratives.”