Merkel says Germany opposes 'coronabonds' in virus crisis

ABS-CBN News

Posted at Mar 27 2020 07:21 AM | Updated as of Mar 27 2020 08:34 AM

Medics take care of a coronavirus infected patient upon his arrival from Italy to the University Hospital for further treatment, in Dresden, Germany March 26, 2020. Matthias Rietschel, Pool/Reuters

BERLIN - Germany remains opposed to the idea of so-called "corona bonds" that would pool the debt of the 19 eurozone countries in response to the coronavirus crisis, Chancellor Angela Merkel said Thursday.

Speaking after a video conference with other EU leaders, Merkel rejected the proposal backed by countries including France and Italy.

"From the German side and from other sides, we said that this was not the view of all member states," Merkel said, adding that the existing European Stability Mechanism (ESM) was her "preferred instrument".

"With the ESM, I think we have a crisis instrument which opens up a lot of possibilities, and which does not call into question the basic principles of joint but also individually responsible action," she added.

She admitted that EU leaders had discussed "whether the ESM contains enough possibilities, and how strong and quick our answer must be".

The existing ESM bailout fund is unpopular in southern European countries such as Italy, as it effectively makes financial aid conditional on economic restructuring.

In a letter addressed to the President of the European Council Charles Michel on Wednesday, the leaders of nine countries including France's Emmanuel Macron and Italy's Giuseppe Conte called for the issuance of European "corona bonds" to fight the coronavirus crisis.

Other countries such as Germany and the Netherlands have repeatedly dismissed the idea as an attempt by over-spending southerners to take advantage of the cheap borrowing rates enjoyed by states with balanced budgets.

 
© Agence France-Presse