Is the EU's coronavirus rescue package adequate?
Shortly before Easter the EU finance ministers adopted the largest rescue package in the history of the bloc: 540 billion euros are to be made available in the form of loans to businesses and states as well as to support unemployment funds. The controversial coronabonds are, however, off the table for the time being. Commentators are for the most part sceptical about the deal.
Terms are too vague
Bild has mixed feelings about the EU's rescue package:
“There can be no talk of the 'precisely targeted' aid the government had promised. Tough credit terms have been replaced by vague, sham requirements. Highly indebted states like Italy and Greece are receiving billions to combat the 'direct or indirect' consequences of the corona crisis. What does that mean? Will German tax money soon be used to restructure the Italian airline Alitalia, which was bankrupt long before the crisis? Who will make sure that the loans do not sink into ailing bankrupt companies? The Germans are prepared to do their bit to get Europe out of the corona crisis. But only if they can trust the measures.”
Solidarity has won out
Although the rescue package won't compensate for all the damage caused by the corona crisis it is definitely a commendable step in the right direction, Le Soir says:
“In these bleak times it is important to stress how far the 27 states have come, how much these 500 billion or more euros can help, as well as how dogma-like taboos have been broken with the suspension of the Stability Pact, the possibility of joint financing of short-time work, etc. And all this within two weeks! Yes, more must be done if we want to continue to believe in this agreement's good intentions. Nevertheless, what it has already achieved shifts the European balance in favour of solidarity and roundly rebuffs both the populists who want to destroy the European Union and the Chinese who wanted to make short work of it.”
Austerity will prevail
States that already have huge debts are to be given easier access to loans from the European Stability Mechanism. In the long term this is not a good solution, Večer argues:
“Since there will be no coronabonds allowing joint debt at the EU level, the countries worst hit by the coronavirus epidemic will request assistance from the ESM bailout fund. Then the Germans and their allies will think up various conditions for granting these loans in new marathon negotiations and all-night sessions. These will be new austerity measures that once again hit the most affected countries and the most vulnerable citizens the hardest.”
Complex conflicts must not be reduced to a duel
The Netherlands' stringent 'no' vote makes a particularly bad impression against the backdrop of the country's lax tax policy, Massimo Riva points out in his column in La Repubblica:
“Our Foreign Ministry is reportedly preparing a comprehensive dossier on tax havens that have been thriving undisturbed in the EU for years. The results of this investigation are to be included in the negotiations on the crisis triggered by the current pandemic. It's clear that the initiative has one country in particular in its sights: the Netherlands. ... But it would be a good thing if the Foreign Ministry's move did not lead to a kind of derby between Rome and The Hague. The issue of tax dumping within the Union is too serious and grave a problem to be reduced to a duel.”
Debt relief instead of mountains of debt
Writing in Le Monde, economists Baptiste Bridonneau and Laurence Scialom make the case for putting the decision in the hands of another body than the EU:
“As opposed to the introduction of joint European bonds, which requires unanimity, the ECB's writing off of sovereign debt is based on a monetary policy decided by a two-thirds majority. ... It wouldn't be the first time the Governing Council has made a decision without a consensus: the 2012 bond purchases were carried out without the approval of Bundesbank President Jens Weidmann. ... Faced with today's economic and environmental crisis it may be necessary once again to shift the balance of power in favour of those wanting a change of policy rather than those who back the status quo. In that way the ECB would once again save the Eurozone from its demons.”