The heads of state and government of the European Union (EU) have given their finance ministers two weeks to come up with more measures to respond to the economic crisis caused by the coronavirus, after Italy and Spain have stood up to claim more determined European action.

“We have discussed all possibilities and have made the decision to continue all our efforts based on a very strong commitment. We are ready to do whatever it takes to find the right solution, but we have to continue our efforts,” said the president of the European Council, Charles Michel, after a videoconference summit of more than six hours.

The debate between the leaders, aimed at defining the economic response to a crisis that will drag the EU and the eurozone into recession this year, has been closed with a statement that merely celebrates the measures already approved and asks their ministers of Economy and Finance (the Eurogroup) present proposals “in two weeks”.

“These proposals should take into account the unprecedented nature of the COVID-19 shock that affects all of our countries. Our response will be increased, as necessary, with more action in an inclusive way, in light of events, to give a broad response, “says the text.

The community leaders have not closed an agreement, therefore, neither for the intervention of the eurozone rescue fund, the European Stability Mechanism (ESM), nor for the issuance of “coronabonos”, mutualized debt of the Union.

These are the two fundamental measures around which the discussion has revolved and which will remain on the table in the deliberations of the Eurogroup.

“The door is open to discuss all possibilities on the table,” confirmed the President of the European Commission, Ursula von der Leyen, asked about whether the “Coronabonos” had been definitively rejected.

RESCUE FUND

On Tuesday, the Eurogroup had advocated creating a specific financing line for the pandemic channeled by the MEDE, which has 410 billion euros in lending capacity. This line would be open to all countries and would allow those requesting it to grant funds for up to 2% of their GDP with certain conditions.

The ministers of Economy and Finance, however, left the final decision in the hands of the leaders, who today have been divided on whether to directly mention the ESM as the solution, as drafts of the statement circulated during the day have shown.

On the issue of “coronabonos” it was already impossible to find an agreement at the ministerial level and it has not even appeared in the drafts.

This tool, similar to the “eurobonds” that were raised and discarded as a solution to the debt crisis in the eurozone in 2011, is rejected by Germany, the Netherlands or Austria for supposing the mutualisation of debt and its risks among community partners.

By contrast, nine countries – Spain, France, Italy, Belgium, Portugal, Ireland, Greece, Slovenia and Luxembourg – claim these emissions arguing that this crisis has been caused by an external cause and affects all countries, which was not the case in 2008.

During the summit, the Spanish president, Pedro Sánchez, and the Italian prime minister, Giuseppe Conte, stood before what they considered an agreement lacking the ambition that the crisis requires according to the two States most affected by it.

“Spain, together with Italy and other countries, requires a clear mandate from the Eurogroup and concrete proposals for medium and long-term financing,” the Spanish government said in a statement after the meeting.

Conte had announced, with the conference still underway, that they were asking their counterparts to come up with a joint plan in ten days. “The consequences of coronavirus should not be addressed in the coming months, but tomorrow morning,” said the Italian president.

It does not seem, however, that the “coronabonos” are going to be part of it.

The German chancellor, Angela Merkel, assured after the summit that the “coronabonos” are not a “shared option” by Germany or by other countries of the community bloc, and urged to “evaluate all the instruments” that the EU already has.

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