Conte doubles down on demand for coronabonds

Italian Prime Minister Giuseppe Conte (C) attends a video press conference at Chigi Palace in Rome, Italy, 16 march 2020. [Ettore Ferrari/EPA/EFE]

The “full firepower” of the European Union will be needed to overcome the historic shock of the coronavirus crisis, Italian Prime Minister Giuseppe Conte told German media Sunday (19 April), repeating calls to pool European debt.

Ahead of a video conference between EU leaders this Thursday, Conte reiterated demands for controversial pooled debt instruments known as “coronabonds” in an interview with the Sueddeutsche Zeitung (SZ) newspaper.

“We are experiencing the biggest shock since World War II, and Europe has to come up with an answer,” said Conte.

The “full firepower” of the EU was needed, specificially “with the issuance of shared bonds”, he added.

He insisted that opposition to coronabonds from the Netherlands and Germany “had to change”, and said he was determined to keep advocating for a “shared, ambitious and fair financial instrument”

Coronabonds, he added, would not “collectivise past or future debts” but would be “specifically designed and time limited”.

Italy is one of several southern European states which have been calling for common debt facilities to cushion the economic impact of the virus.

France says future EU recovery fund will amount to €500bn, financed by joint debt

European finance ministers have agreed to a post-crisis economic recovery plan worth €500 billion, which opens the door to jointly issued debt, France’s finance minister claimed on Thursday (9 April).

But conservative politicians in the north fear the plans would mean the eventual mutualisation of all sovereign debts and their taxpayers footing the bill for supposed southern profligacy.

Following marathon talks earlier this month, EU finance ministers agreed an initial coronavirus rescue package worth about €540 billion, but set aside the coronabonds suggestion.

Eurogroup agrees on €540 billion corona-package

The Eurogroup finally agreed on a €500 billion package to support member states, companies and workers in the coronavirus crisis, after The Netherlands and Italy overcame they differences. Leaders will discuss in the coming days the recovery plan and the possibility of ‘coronabonds’.

Around €240 billion will come from the European Stability Mechanism (ESM), the EU’s bailout fund, much maligned in the south due to the fact that it makes financial support conditional on economic restructuring.

“We have not forgotten that the Greeks were forced to make unacceptable sacrifices in order to receive loans,” Conte told SZ on Sunday.

He said he was unconvinced that the conditions would be less stringent this time around.

Conte insisted that coronabonds were the only way to send a message to the world that “Europe is solid and united”.

The Italian leader also said his country, which has been hit hardest in Europe by the pandemic, had been “alone” at the start of the outbreak in February.

The disease has killed 23,227 in Italy — second only to the United States worldwide.

Earlier this month, European Commission president Ursula von der Leyen apologised to Italy for the lack of a “common European response” at the start of the crisis.

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