Today, the Green MEPs of the Economic and Monetary Affairs Committee in the European Parliament presented their proposal for a European fiscal response to the Corona crisis. The Greens are the only group in the European Parliament with a common position on this issue. They are calling for the issuance of common corona bonds with long maturities of 1 trillion euros by an EU fund, guaranteed by the Member States and jointly established by the European Parliament and the Council of Ministers through co-legislation. The Green proposal builds on the French government’s intergovernmental proposal and extends it to include democratic co-decision by the European Parliament. The proposal could be adopted quickly, also a more limited group of member states would be possible. In the context of the Corona crisis, the funds would allow expenditure where it is most needed. After expiry, the bonds would be repaid jointly by the Member States in proportion to their respective economic strength. In this way, Europe could provide aid for the direct costs of the corona crisis and support the stabilisation and restart of the European economies. Seven leading economists from Germany have put forward a comparable proposal and there are several similar proposals at European level. Tomorrow, decisions by the Eurogroup on the European fiscal response to the Corona crisis are expected.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“The solidarity of the European community is put to the test. The Corona crisis was not caused by any country. European solidarity is the order of the day. European solidarity means shared political and financial responsibility. The German Government’s proposals for crisis management in the Eurozone are insufficient. We need European corona bonds to raise 1 trillion euro. With common corona bonds we can jointly meet the costs of public health, economic stabilisation and the reconstruction of our economies. Reconstruction plans must be in line with the Paris Agreement and the objectives of the EU Commission’s Green Deal. Solidarity in Europe means financing common tasks together and repaying the funds together. Only in this way can we prevent a deep and long-term division of Europe.
Those who oppose joint bonds merely shift joint liability to the independent ECB, thus shifting it outside of democratic decision-making. European leaders must not again burden monetary policy with crisis management and shirk the necessary European fiscal policy.
Finance ministers must send a strong signal of European solidarity tomorrow and refrain from imposing harmful austerity conditions on countries particularly affected by the crisis. The German Government must not be petty towards its European friends in this emergency situation, because Germany has benefited most from the euro. When countries like Italy or Spain suffer economically, Germany and the entire eurozone will suffer in the end.“
Link to the Green Corona-Bond Paper: https://sven-giegold.de/wp-content/uploads/2020/04/20-4-06-Greens-proposal-corona-fund-signed-2.pdf