Merkel open to bigger EU budget, bonds to finance post-crisis recovery

Michelle K. Wallace

BERLIN (Reuters) – German Chancellor Angela Merkel signalled readiness on Monday to finance economic recovery in Europe from the coronavirus pandemic through a bigger European Union budget and the issuance of joint debt via the European Commission.

FILE PHOTO: German Chancellor Angela Merkel briefs the media about measures to avoid further spread of the coronavirus disease (COVID -19) after a government meeting at the chancellery in Berlin, Germany, April 20, 2020. Markus Schreiber/Pool via REUTERS

Asked if she backed proposals to help fellow EU countries hardest hit by the pandemic such as Italy and Spain via the EU budget and the issuance of EU bonds, Merkel said an EU treaty article already allowed such action and that it was used to finance a European short-time work scheme.

“I can imagine such instruments further down the line,” Merkel told a news conference, adding: “More generally I would like to say that Germany not only wants to act in solidarity, but that it will act in solidarity.”

Merkel insisted that this act of solidarity would have to happen within the rules of existing European treaties, but repeated her mantra that Germany’s well-being depended on the well-being of its European partners.

“Of course it must be kept in mind that all countries, all member states of the European Union got into this situation through no fault on their own. This is a pandemic,” Merkel said.

So this crisis was not a result of national failures in fiscal policy or other homegrown decisions, the conservative leader of Europe’s biggest and most affluent economy added.

Merkel said that the next EU budget would look very different and bigger than that which was discussed before the outbreak of the coronavirus pandemic.

She even suggested that Germany was open to amendments to EU treaties if that would expedite measures to restore economies, but she warned that such a process would take too much time.

“One can discuss new treaties but this would take two or three years to find solutions,” Merkel said.

“We’ll need quick answers to address this pandemic and Germany will participate in answers of solidarity that go beyond the 500 billion euros that we already have,” she said in reference to the volume of an aid package agreed by European finance ministers earlier this month.

Reporting by Andreas Rinke and Michael Nienaber; Editing by Mark Heinrich

Source Article

Next Post

Coronavirus furlough scheme: More than 140,000 firms apply on first day | UK News

More than 140,000 firms have applied for the government’s job retention scheme since it launched this morning, the chancellor has said. Speaking at the daily Downing Street briefing, Rishi Sunak announced the grants to help cover the wages of more than one million people during the COVID-19 crisis. Mr Sunak […]