'This could kill the EU' Former German MEP admits coronabonds a MASSIVE threat to bloc
ITALY's demand for the adoption of a system of coronabonds to spread the cost of repairing the economic damage caused by the coronavirus pandemic could kill the European Union, a former MEP has warned.
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Hans-Olaf Henkel, who stepped down at the last election in May, is deeply concerned at the mounting pressure Germany is coming under to agree to a system whereby debt would be issued collectively, to the EU27, rather than to individual member states, would mean spending would spiral out of control. Germany's Chancellor Angela Merkel today said she would not cave in to Italian demands for the introduction of common eurozone bonds, nicknamed coronabonds, to mitigate the economic impact of the pandemic, stressing her country would back other instruments to help countries hard-hit by the crisis. However, Mr Henkel fears she is coming under increasing pressure, particularly from France, to reverse her stance.
He told Express.co.uk: "This is crazy for many reasons.
"Number one, and this is really, really dramatic, a country can make debts and other countries in the EU27 would have to vouch for those debts or pay them. This is organised irresponsibility.
"So any politician in any country can become popular by offering the voters some goodies - but others have to pay for it.
"Now, if others realise they have to pay for the debt they start doing the same thing.
"So it is a totally irresponsible crazy idea."
Mr Henkel also said there had been little effort in debates concerning the subject to distinguish between the EU27 - in other words the bloc's 27 member countries - and the 19 states which were members of the eurozone, in other words, countries which have adopted the euro as their currency.
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He explained: "It is really very strange that the entire discussion on eurobonds as a remedy for the reactions of the results of corona is actually only a discussion within the eurozone.
"They pretend again, Brussels, everybody who is in this debate, they pretend as if this would be a EU tool.
"Well, eurobonds would only be available to eurozone countries - where is Sweden, Denmark, Poland, Hungary, Romania, Bulgaria?"
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Finally, Mr Henkel offered a stark warning to Brussels about the potential consequences of adopting a system of coronabonds.
He said: "I agree with the current position of the government.
"I don't know how long they will be able to, to resist the pressure, especially from France.
This is absolutely irresponsible and in my view would kill the European Union at the end
"I don't mind at all if the German taxpayers gift the Italian people.
"Fine, let make a gift of a billion euros or whatever, put it in and send it over as it gets from Germany to Italy very much like the United States has done to Germany with the Marshall Plan.
"This would be a one-off gift but to give Italy the opportunity to pile up debt - by the way without any limit, without any interest and without any date by which they have to pay back - this is absolutely irresponsible in my view would kill the European Union at the end."
Speaking earlier today, Mrs Merkel said: "I spoke today with Italian Prime Minister Giuseppe Conte for a long time and we agree that there is an urgent need for solidarity in Europe, which is going through one of its most difficult hours, if not the most difficult.
"And Germany is ready for this solidarity and committed to it. Germany's well-being depends on Europe being well. Now, which instruments are fit for this purpose, here there are different views.
"You know that I don't believe we should have common debt because of the situation of our political union and that's why we reject this.
"But there are so many ways to show solidarity and I believe we will find a good solution."