The European Union’s (EU) economic commissioner, Paolo Gentiloni, said an uneven recovery from the Covid-19 crisis could be a threat to the very existence of the union.
He said the future solidarity of the 19 member states could depend on “the speed at which lockdowns can be lifted…and by each country’s financial resources”, adding that, “Such divergence poses a threat to the single market and the euro area.
“Yet,” he said, “it can be mitigated through decisive, joint European action.”
Speaking to the media in Brussels, Gentiloni said, “The group of 19 nations using the euro as their currency will see a record decline of 7.75% this year, and grow by 6.25% in 2021, the European Commission said in its spring economic forecast.
“It is now quite clear that the EU has entered the deepest economic recession in its history.”
Writing in The Guradian, Charles Grant, director of the independent thinktank, the Centre for European Reform, echoed Gentiloni’s sentiment, saying, “The European Central Bank has come up with an impressive €750 billion bond-buying programme. But ECB action will not suffice. The EU needs to take on a role in fiscal policy. France, Spain and Italy want the EU to issue bonds guaranteed by the member states. The biggest share of the money would go to the neediest countries, to subsidise spending on health, corporate grants, unemployment pay and investment.
“Eurobonds would mean the better-off EU countries helping to limit dire outcomes in southern Europe. The Germans, Dutch and other northerners oppose, fearing this would discourage weaker countries from undertaking painful reforms. They have a point, but the alternative – eurozone members sinking into a negative spiral of falling GDP and rising debt, and perhaps exiting the EU – would be worse for all concerned.”