Sven Giegold

Eurogroup: Dispute instead of solidarity must not be Europe’s signal in the corona crisis

Yesterday, the euro finance ministers met for a video conference to take fiscal policy decisions to tackle the corona crisis. On the agenda were precautionary ESM credit lines for badly hit euro countries, additional liquidity support for companies by the European Investment Bank (EIB), a proposal from the EU Commission for a temporary European unemployment reinsurance scheme, a Dutch proposal for grants for national health expenditures and a French proposal for a recovery fund that could raise funds to fight crises in the Member States by issuing joint bonds. The finance ministers had not reached an agreement in their last two video conferences. The heads of state and government had also made no fiscal policy decisions at their last video conference and threw the hot potato back to the finance ministers. No agreement was reached this morning. While France, Spain and Germany could have reached an agreement, the Netherlands and Italy blocked a compromise. The meeting has since been interrupted and will continue tomorrow.

The Greens/EFA group in the European Parliament presented their own proposal for Coronabonds this Monday. They are demanding the issuance of long-term joint Coronabonds by an EU fund amounting to 1 trillion euros, guaranteed by the Member States, and jointly set up by the European Parliament and the Council of Ministers in the process of co-legislation. The green proposal builds on the French proposal and extends it to include democratic co-decision by the European Parliament instead of intergovernmentalism. In the context of the Corona crisis, the resources would enable spending where it is needed most. After expiry, the bonds would be repaid jointly by the Member States, in proportion to the respective economic strength.

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:

“It is bitter when disputes instead of solidarity are the Eurogroup’s signal in the corona crisis. The eternal quarrels damage Europe´s reputation. Germany and Europe must now show solidarity. It is particularly poor show that the Netherlands insist on their tax haven status but veto even insufficient and limited responses to the corona crisis. Italy’s insistence on a bigger package including Coronabonds is understandable and the German Government has to move in this respect. If Coronabonds are taken off the table, Europe risks to break up. Even combined, the other European measures under discussion amount to an insufficient share of 4% of GDP. We need a solidarity-based emergency package with fair burden-sharing for the European fight against the crisis. It is not acceptable that Olaf Scholz uses the fiscal bazooka for Germany, but only offers small instruments for Europe. If the Euro finance ministers cannot agree, doubts arise as to the Eurogroup’s right to exist. Joint liability through joint bonds would not be introduced for the first time, we already have it with the ESM and the ECB. 

Finance ministers should keep one thing in mind: no European country has caused this crisis. A solidarity-based and large fiscal policy response is now needed at European level. Europe is approaching the abyss if countries hit hard by the crisis are abandoned. Coronabonds to finance the joint crisis management and a joint repayment based on on the economic strength of member states would be the right answer. European Parliament and Council should democratically adopt corona bonds and then jointly monitor the use of the funds.”

Link to the Greens/EFA´s proposal for Coronabonds:

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