The coronavirus also makes the European Union sick. Certainly, the finance ministers of the 27 countries of the European Union have the priority of dealing with the economic and social crisis that is going to increase the public debts of the states. They do not reach an agreement once again:After the 2008 financial crisis and the issue of current refugees, it is now the case of coronavirus. The measures to be taken in relation to the economic crisis are not agreed.
At the meeting of 26 March, which lasted six hours, it became clear that the gulf between the States of the South, which are expecting more solidarity with each other, and those of the North, with Germany on the front lines, was clear. In this way, a period of fifteen days has been allowed for agreement to be reached between the 27 finance ministers. In the end, the issue of solidarity between States is on the table.
Disagreement on coroners
The new term invented by the Italian Prime Minister, Giussepe Conte, is at the heart of the debate between the European finance ministers. Coronaviruses would be a means of financing expenditure arising from the economic and social crisis: limited to this crisis and debt bonds guaranteed by the European Union or the euro zone. What change does that mean?
Currently, states are issuing their own debt bonds to finance their deficit, of which they are both private and public purchasers. These are debt bonds issued by the European Union, i.e. issued jointly by all Member States. Instead of each looking at his own, that path would be the union and mutualization of debt.
They would also be a way of protecting economically precarious States, because many speculators are enriching themselves with the situation of those States, whose interest rates are much higher. For example, the interest rate on Italian bonds in the previous week increased to 2.4%, compared with -0.39% in Germany. "There is a big difference between them and, as Germany puts it, countries with large deficits suffer from great discrimination on the part of the markets," said economist Laurent Quignon.
This proposal is supported by France, Italy, Spain – that is, the states most affected by the coronavirus today – Greece, Portugal, Belgium, Ireland, Slovenia and Luxembourg. The President of the European Parliament, David Sassoli, also defended this formula at his meeting on 26 March, when he said that "it is time for solidarity between the peoples of Europe". However, Germany, the Netherlands, Austria and Finland do not agree with this solution, because they are afraid that the final bill will be paid by themselves. Germany has shown its support for this mutualisation and, as a solution, has chosen to propose credits that can be paid within five to seven years.
As the European Union’s financial crisis is escalating, every day the European Union is taking further steps to limit damage. On 18 March, the European Central Bank announced a huge
purchase plan of EUR 750,000 million to prevent the Covid-19 epidemic from disrupting the euro area.
