Prime minister António Costa is one of nine European leaders pushing habitually reluctant ‘richer’ Member States today for the creation of corona bonds, to enable countries to better face up to the economic crisis caused by the Covid-19 pandemic.
Mr Costa has put his name to a letter directed at the EU Summit in Brussels signed by counterparts in Spain, France, Italy, Belgium, Luxembourg, Slovenia and Greece.
The contents of the letter were pre-released to the press, possibly in a bid to strengthen the nine’s ‘case’.
If ‘successful’, it would be a major breakthrough.
Explain reports, “it’s not the first time the subject of issuing joint debt has been raised in the region. European countries had initial discussions on this issue at the height of the sovereign debt crisis of 2011, but certain nations believed it was too risky to join their debt with other countries, which were deemed at a higher risk of default”.
Say the nine now is not the time to quibble over who carries the most cumbersome debt.
“We need to work on a common debt instrument issued by a European institution to raise funds on the market on the same basis and to the benefits of all Member States”, says the letter.
Germany, the Netherlands, Finland and Austria are the countries understood to be less than enthusiastic about the plan.
According to Reuters the ‘push back’ from these northern countries “in the face of Europe’s most serious crisis since World War Two highlights a lack of solidarity that has been undermining the EU’s principle of shared values ever since the debt crisis and the migrant crisis of 2015”.
Said Goldman Sachs analyst Alain Durré: “Given the severe economic and fiscal repercussions of the coronavirus outbreak, investors have again started to question the sustainability of public debt in southern Europe”.
