After an acrimonious virutal summit of European leaders, Giuseppe Conte refused to sign up to the concluding statement after Germany and the Netherlands refused to back the so-called “corona bonds” relief measure. They clashed over the creation of a joint Eurozone debt instrument to help finance the bloc’s response to the global pandemic. The Italian issued a tough ultimatum, giving the European Council just 10 days to return with an “adequate solution” after the video conference run three hours over the schedule.
Council President Charles Michel managed to save the emergency summit from complete collapse by brokering a second discussion in two weeks time.
Leaders will once again consider new proposals made by Eurozone finance ministers in the interim period.
Dutch prime minister Mark Rutte and Germany’s Angela Merkel provided the main opposition to the creation of the “corona bonds” debt scheme.
Instead they insisted the European Stability Mechanism, the Eurozone’s €500 billion bailout fund created after the last debt crisis, could be used to heal the wounds left by the coronavirus outbreak.
But Berlin and the Hague insist on imposing strict conditions on countries seeking assistance, as stated by the ESM’s rulebook.
Mrs Merkel said: “The ESM is our preferred instrument because it was created especially for crisis like this.”
Mr Rutte demanded an “informed and intelligent” debate about the conditionality of any cash handouts.
The Dutch leader is adamant that the bloc should only resort to creating a new measure as a last resort because the virus could still continue to wreak havoc into the summer.
“You have to make sure that you still have cards up your sleeve, and we don’t spend everything in the first two weeks,” he said.
But the fiscally prudent leaders sparked fury in Rome, during the videoconference Mr Conte blast: “How can one think that instruments developed in the past, built to intervene in the event of asymmetric shocks and financial tensions affecting individual continues are adequate for this symmetric shock?”
He added: “If anyone should think of personalised protection mechanisms developed in the past, then I want to make clear: don’t bother, you can keep it, because Italy doesn’t need it.”
Spanish prime minister Pedro Sanchez joined in with the criticism of their EU colleagues, and joined a task force set up by the Italian leader to look at new economic instruments over the next 10 days.
More worryingly for the bloc, France’s Emmanuel Macron used his intervention to predict the downfall of the Brussels project unless leaders refuse to show solidarity throughout the crisis.
“What’s at stake is the survival of the European project,” he told the 26 leaders.
“The risk we are facing is the death of Schengen.”
Published at Fri, 27 Mar 2020 09:17:00 +0000