Commissioners call for new EU debt – economy

Paolo Gentiloni and Thierry Breton complain that not all member states can put together 200 billion packages like the German one. Aid from Brussels, financed with joint debts, should be the solution.

Economic Commissioners Paolo Gentiloni and Thierry Breton are calling for a new debt-financed EU bailout fund to help member states protect citizens and businesses from high energy prices. “Europe must show solidarity,” write the Italian and the French in a guest article for several European newspapers, including the FAZ. Governments have varying levels of financial leeway for aid programs. So that this does not lead to distortions in the internal market, “we have to think about common European instruments,” says the article. The fact that Germany can afford a 200 billion package and other member states cannot, raises questions.

The duo cites the EU program Sure as a role model. This grants governments cheap loans to finance short-time work benefits. For the 100 billion euro Sure pot, the Commission has taken on debt, for which the member states guarantee. An important difference to the much larger Corona aid fund is that this 800 billion euro fund also transfers non-repayable grants to member states in addition to loans. When such a corona pot was discussed in spring 2020, Commissioner for Economic Affairs Gentiloni and Commissioner for the Internal Market Breton also published a guest article that called for a new fund with similar arguments as now.

Meanwhile, at a meeting with his EU counterparts in Luxembourg, Federal Finance Minister Christian Lindner (FDP) defended the size of the German package as “appropriate in proportion” and referred to the size of the German economy and the term until 2024 Spain and Luxembourg warned at the weekend’s energy ministers’ meeting of the risk that a package of this magnitude could distort the internal market.

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