Belgium, (Brussels Morning Newspaper) European commissioners called for joint borrowing to finance a bloc-wide response to the energy crisis, with Germany objecting to the plan.
In an article in the Irish Times, two EC officials noted that the proposed joint borrowing scheme could be based on the model used in response to the coronavirus crisis, according to Reuters reporting on Tuesday.
European Commissioner for Economic and Monetary Affairs Paolo Gentiloni and European Commissioner for Internal Market Thierry Breton pointed out “it is more important than ever that we avoid fragmenting the internal market, setting up a race for subsidies and calling into question the principles of solidarity and unity that underpin our European project.”
They pointed out that Germany prepared aid worth 200 billion euro for its companies and citizens, stressing that many of Germany’s EU counterparts cannot afford to provide comparable support and noting that this jeopardises competition on the EU market.
Only one option
“Faced with the colossal challenges before us, there is only one possible response: that of a Europe of solidarity,” they stated and added “in order to overcome the fault lines caused by the different margins of manoeuvre of national budgets, we must think about mutualised tools at the European level.”
Under the coronavirus crisis scheme, the EC borrowed 100 billion euro and offered the money to compliant member states to provide aid to their economies to recover from the effects of restrictions imposed with the aim of curbing the spread of the virus.
“Taking inspiration from the [Support to mitigate Unemployment Risks in an Emergency] SURE mechanism to help Europeans and industrial ecosystems in the current crisis could be one short-term solution,” the commissioners noted.
They concluded that the move “could also pave the way for a first step towards the provision of ‘European public goods’ in the energy and security sectors, which is the only way to provide a systemic response to the crisis.”
On the other hand, German Minister of Finance Christian Linder criticised the EC’s call for joint borrowing.
In an interview with ZDF broadcaster on Tuesday, he pointed out that “joint debt does not help us in the long run to strengthen competitiveness or with the sustainable finances of states.”
