By Damon Mitchell • 09 April 2020 • 10:49
THE EU continues to be unable to provide a common response to the economic crisis stemming from the continent’s greatest health crisis. After 16 hours of negotiations, the Finance Ministers of the Veintisiete found that it was not possible to lift the blockade that Italy and the Netherlands were exercising on an agreement that would have allowed the mobilisation of more than half a trillion euros. Faced with this failure Berlin and Paris are now trying to impose a minimum agreement to settle this chapter and begin to tackle economic recovery.
Finance holders were due to approve measures to protect Europe’s productive skin from the formidable erosion it is undergoing by the pandemic. The offer on the table tries to build a safety net for public finances (€240 billion), companies (€200 billion) and workers (€100 billion) urgently.
“There is an urgent need for an agreement on these issues,” Minister Nadia Calviño said on Wednesday. “Europe is playing a lot in this crisis,” she concluded. The red lines drawn by Rome and The Hague made the agreement impossible after hours of breaks, bilateral meetings and drafts that ended up being unacceptable by either side. The main discrepancy was in the European rescue fund (Mede), which is called to act as a firewall in the event that this crisis ends up spreading to sovereign debt. The proposal carried out by the president of the Eurogroup, Mário Centeno, established that countries could receive an amount equivalent to 2 per cent of their GDP to face the pandemic.
Italy had already shown its reluctance to the Mede before the meeting and along with Spain now say they have no intention of requesting these credits.
The Italian minister, Roberto Gualtieri, could enter the Mede game, but not accept the conditions of a rescue given the magnitude of the health emergency facing Italy. Dutchman Wopke Hoekstra attended the meeting tied by the backing of his Parliament, which had given the green light to that rescue in two phases.
Germany and France have agreed on a half a billion euro package. But when they turn this page, the true workhorse of Emmanuel Macron, Pedro Sánchez and Giuseppe Conte will arrive. The three continue to press for a mechanism to finance the recovery of Europe that this Wednesday also failed to find its place in the agreement of the ministers. At stake are not only millions of jobs, but also the danger that, after years of prosperity, this crisis will eventually reopen the gap between the north, capable of meeting all costs, and the south, hit by the pandemic and still a prisoner of the inheritances of the Great Recession.
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