Germany still rules out pooling EU debt after crisis talks

German Finance Minister Olaf Scholz said European finance ministers were close to an agreement. — Reuters pic
German Finance Minister Olaf Scholz said European finance ministers were close to an agreement. — Reuters pic

BERLIN, April 8 — Existing tools will be enough to help the European Union through the coronavirus crisis, German Finance Minister Olaf Scholz said today, again rejecting the creation of controversial “coronabonds” pooled debt instruments.

The bloc can handle the economic fallout “using classic instruments like the European budget”, Scholz said in Berlin. “That’s why I believe it’s enough to focus on these issues and these options for action.”

Scholz was speaking after eurozone finance ministers held marathon talks through the night but failed to agree on a rescue plan to help hard-hit member states cope with the coronavirus outbreak.

Italy and Spain are pleading for a solidarity fund that would be paid for by European partners jointly borrowing money on financial markets.

Sometimes called “coronabonds”, this proposal is however firmly resisted by Germany, the Netherlands and other rich countries who see it as an attempt by the indebted south to unfairly take advantage of the north’s fiscal discipline.

Scholz nevertheless said European finance ministers were “close” to reaching a unanimous agreement, which he said he hoped to see “before Easter”.

Scholz said the proposals currently on the table added up to a rescue package of more than €500 billion (RM2.4 trillion) for the bloc.

That includes a plan for the EU’s bailout fund, the European Stability Mechanism (ESM), to provide 240 billion euros in emergency credit lines to the hardest-hit member states.

It also entails a fund managed by the European Investment Bank and supported by guarantees from member states that could mobilise up to 200 billion euros, mainly targeted at small business, and plans for another €100 billion to aid strained national unemployment safety nets. — AFP

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