Eurogroup president calls for postponing ‘coronabonds’ talks
The president of the EU’s Eurogroup and Portuguese finance minister Mário Centeno has called on a debate over the issuing of controversial ‘coronabonds’ to be shelved until after the crisis.
In an interview with a German newspaper Suddeutsche Zeitung published on Saturday, Mário Centeno said the focus should now be on a “pooling of measures” that have member state consensus.
“We will come out of this crisis with all States having a much higher debt. It is decisive that these debts to not become an obstacle to States accepting more (aggregated) debts which is why we need long-term repayments on borrowing and with low interest,” he said.
One method, which has proved controversial among some EU member states, notably Germany, Austria and Holland, is the issuance of common debt through Eurobonds nicknamed ‘coronabonds’ which could be limited in the time period in which they are issued under a French proposal.
In interviews with other newspapers also such as Le Figaro, La Repubblica, El Pais and Volkskrant, Mário Centeno said that the Eurogroup would propose a new package of measures to defend the euro area and European Union. “We have been working on three new backstops: for sovereign bonds, for businesses and for workers”.
“We have to be as comprehensive as possible for the different sectors of our economy. We are working on an ESM credit line open to all countries of up to €240Bn. It will be a new line of defence. Then, we have a proposal by the EIB (European Investment Bank) for a pan-European guarantee fund to increase its capacity by up to €200Bn with the details and numbers not yet finalised” he stated.
Centeno was referring to a credit line plan from the European Stability Mechanism for States with problems and funds from the European Investment Bank to support companies in lay-off regime, but did not insist on pushing for ‘Coronabonds’.
This money would be earmarked for EU businesses and especially for SMEs. Additionally, on Thursday the Commission presented a €100Bn backstop for employment protection schemes. These three measures represent a safety net of roughly €500Bn.
Mário Centeno said Europe was experiencing the worst recession ever recorded in the past 70 years and was responding with measures to keep companies and jobs in place while supporting wages.
“What I told leaders is that the challenge the Euro is facing is unprecedented and all EU citizens look at us as their first line of defence. The debate was quite open, as usual. It was a step in a process that will shortly result in decisions. We need more union in the crisis, we don’t only need more money or a consensus around this given package. We need more union which now means more integration. That is the only way we can protect the single market. That signal must come from leaders,” he said.
“I will always work for more integration in Europe, but the debate on common bonds should not put our ability to each an agreement on an emergency package based on the three protection measures in danger,” the Eurogroup president concluded.