EU finance ministers yesterday failed to agree on a bailout plan to help hard-hit member states face the COVID-19 pandemic, after Italy refused to abandon its plea for “coronabonds” to share the burden.
“After 16 hours of discussions, we came close to a deal, but we are not there yet. I suspended the Eurogroup and [we will] continue tomorrow,” said Mario Centeno, the Portuguese president of the Eurogroup.
Despite efforts, bickering EU finance ministers were unable to bridge differences on how to rebuild their economies after the coronavirus, with a north versus south split on burden sharing for the worst affected countries, especially Italy and Spain.
Photo: AFP
The European economy has been battered by the pandemic as national governments impose strict lockdowns that have closed businesses and put normal life on hold.
The ministers’ video conference dragged on from Tuesday into yesterday, with Italy and Spain insisting on a solidarity fund that would be paid for by European partners jointly borrowing money on the financial markets.
Sometimes called “coronabonds,” this proposal is being 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.
Berlin and its allies insist instead that any European rescue should use the eurozone’s 410 billion euro (US$446 billion) bailout fund, as well as wait to see the effects of the massive monetary stimulus already unleashed by the European Central Bank.
Centeno, who is also the Portuguese minister of finance, is tasked with finding a compromise in a fight that has revived the bitter acrimony that split Europe during the eurozone debt crisis a decade ago.
“My goal remains: a strong EU safety net against the fallout of COVID-19 to shield workers, firms and countries, and commit to a sizeable recovery plan,” he said.
On Monday, German Chancellor Angela Merkel reiterated her government’s position in favor of activating the European Stability Mechanism (ESM) bailout fund to help countries that need it.
However, she pointedly did not mention shared borrowing such as coronabonds or eurobonds, angering Rome.
Influential France has backed Italy and Spain, but yesterday said it was looking for a compromise hand in hand with Germany.
“With German [Minister of Finance] Olaf Scholz, we call on all European states to rise to the exceptional challenges to reach an ambitious agreement,” French Minister of Finance Bruno Le Maire said after the talks ended.
Italy is refusing recourse to the ESM, which was created in 2012 during the eurozone debt crisis when states such as Greece no longer had access to borrowing on the markets.
Its programs come with strings attached for countries that use it — heavy conditions that Italy and Spain say they would refuse if other capitals were to try to impose them.
Northern countries insist that conditions can be kept to a minimum given the cause of the crisis, but that in the longer term a country would have to get their finances in order.
“In the ‘northern’ view, the idea that there will never be any conditions to the ESM money, and the mutualization of debt, is a bridge too far,” an EU diplomat said.
Officials in Brussels had expected Germany and its allies to prevail on Tuesday, although ministers would not dismiss ideas such as coronabonds outright.
Whatever is eventually agreed by the ministers would then go to EU leaders, who are expected to convene by videoconference later in the month.
Also under discussion is a lending facility from the European Investment Bank for struggling small and medium-sized businesses, and a guarantee fund for certain national unemployment schemes to be run by the European Commission.
MINERAL DEPOSITS: The Pacific nation is looking for new foreign partners after its agreement with Canada’s Metals Co was terminated ‘mutually’ at the end of last year Pacific nation Kiribati says it is exploring a deep-sea mining partnership with China, dangling access to a vast patch of Pacific Ocean harboring coveted metals and minerals. Beijing has been ramping up efforts to court Pacific nations sitting on lucrative seafloor deposits of cobalt, nickel and copper — recently inking a cooperation deal with Cook Islands. Kiribati opened discussions with Chinese Ambassador Zhou Limin (周立民) after a longstanding agreement with leading deep-sea mining outfit The Metals Co fell through. “The talk provides an exciting opportunity to explore potential collaboration for the sustainable exploration of the deep-ocean resources in Kiribati,” the government said
The head of Shin Bet, Israel’s domestic intelligence agency, was sacked yesterday, days after Israeli Prime Minister Benjamin Netanyahu said he no longer trusts him, and fallout from a report on the Oct. 7, 2023, Hamas attack. “The Government unanimously approved Prime Minister Benjamin Netanyahu’s proposal to end ISA Director Ronen Bar’s term of office,” a statement said. He is to leave his post when his successor is appointed by April 10 at the latest, the statement said. Netanyahu on Sunday cited an “ongoing lack of trust” as the reason for moving to dismiss Bar, who joined the agency in 1993. Bar, meant to
Indonesia’s parliament yesterday amended a law to allow members of the military to hold more government roles, despite criticisms that it would expand the armed forces’ role in civilian affairs. The revision to the armed forces law, pushed mainly by Indonesian President Prabowo Subianto’s coalition, was aimed at expanding the military’s role beyond defense in a country long influenced by its armed forces. The amendment has sparked fears of a return to the era of former Indonesian president Suharto, who ex-general Prabowo once served and who used military figures to crack down on dissent. “Now it’s the time for us to ask the
The central Dutch city of Utrecht has installed a “fish doorbell” on a river lock that lets viewers of an online livestream alert authorities to fish being held up as they make their springtime migration to shallow spawning grounds. The idea is simple: An underwater camera at Utrecht’s Weerdsluis lock sends live footage to a Web site. When somebody watching the site sees a fish, they can click a button that sends a screenshot to organizers. When they see enough fish, they alert a water worker who opens the lock to let the fish swim through. Now in its fifth year, the
RSS