European Union: A north-south split on rescue package
The European Union has come together to rescue the economy from the ravages of the coronavirus pandemic, said Béatrice Delvaux in Le Soir (Belgium). Nearly every country in the EU has instituted a lockdown to stop the spread of the virus, and with businesses shuttered and governments doling out money to idled workers, national budget deficits are soaring. That’s why in an emergency meeting by videoconference last week, finance ministers from the 19 countries that use the euro agreed to “save the most essential thing: the principle of solidarity.” True, they didn’t sign off on a proposal backed by France, Italy, Spain, and Ireland to create “Eurobonds” that would have been funded by all and spent on the worst-hit countries—especially Italy and Spain. Germany and the Netherlands nixed that idea. But they did muster a gigantic loan package of nearly $600 billion to be made available to governments and businesses. “In these bleak times, it is important to stress how far” the EU’s members have come, and in such a short time.
This sorry compromise exposes the fundamental divide at the heart of the EU, said Simon Jenkins in The Guardian (U.K.). The bickering during that meeting was brutal, with “Germans and Dutch insulting Italians and Spaniards.” The northern nations “still do not trust the hard-pressed southern ones to spend money wisely and pay back their debts.” Solidarity? There was no solidarity—but then, there never has been. Following the 2008 financial crisis, the European Central Bank was slow to pump more money into the economy, and when the bank did belatedly take action, it was aimed “chiefly at underpinning German bank loans to Greece and others.” Then in 2015, as migrants poured across the Mediterranean, the EU largely left Italy and Greece alone to cope with the influx. Now, at the very moment Italy’s economy is close to collapse, and when “for the first time in 75 years, large numbers of Europeans are simply unable to buy food,” the EU “is silent.”
But “nonsense” Eurobonds would have only created more antagonism in the bloc, said Werner Mussler in the Frankfurter Allgemeine Zeitung (Germany). If member states were to start pooling their debt, they would also have to “cede their sovereignty over budgetary policy” to the EU, giving Brussels the right to decide where and what each country spends. “You don’t want that in Rome and Paris any more than in Berlin.” As a sop to France, which has always pushed for ever closer union, the finance ministers have agreed to consider joint bonds to pay for a “reconstruction fund” once the pandemic is over. So “the dispute will continue.” Germany is just being “selfish,” said Darja Kocbek in Vecer (Slovenia). Its export economy has thrived because of the EU’s common market and currency. But when the time comes to give back, it says no. Instead, Italy and Spain will have to take on loans—and you can bet that the Germans will attach “new austerity measures” that “once again hit the most-affected countries and the most-vulnerable citizens the hardest.”