Virus-hit Europe must 'go further, act stronger' to boost economy: France

Mariëtte Le Roux, Agence France-Presse

Posted at Apr 02 2020 08:47 PM


PARIS - France's finance minister urged European nations on Thursday to "go further and act stronger" to help each other's economies recover from the ravages of the coronavirus crisis.

Europe should deploy all existing crisis instruments, Bruno Le Maire said, reiterating his country's call for a common fund to help the hardest-hit nations.

He said a lack of solidarity now could threaten the European Union's very survival.

"In this crisis... either Europe stays true to its political roots and it will thrive, or Europe gives in to panic and national selfishness and it will disappear," Le Maire said in a press conference broadcast via Twitter.

These roots are solidarity, security and human dignity, he said.

"There is one single political question: Shall we stand together or not? Shall we stand together as a unified continent to face the long-term and dramatic consequences of the economic crisis or shall we give to the world the sad image of a continent divided?"

Le Maire said Europe's economic recovery from the unprecedented health crisis that has halted planes and trains, shuttered factories and pushed hospitals to the brink, "will be long, drawn out, difficult and costly".

"The EU now needs to go further and act stronger to support our economies," he said.

Possible steps included activating the European Stability Mechanism, which provides loans to countries in difficulty, "with light conditionalities and without any stigma."

LEGITIMATE PROTECTION

Le Maire also proposed activating 200 billion euros ($219 billion) worth of financing from the European Investment Bank, and a 100 billion euro "unemployment reinsurance scheme" so countries can help people facing temporary layoffs.

But the EU should also reflect on long-term instruments to quickly restart the economy after the crisis, he said.

France's is pushing for a joint fund to help EU countries kickstart their economic recovery and bolster healthcare capacities over a five- to ten-year period.

Such a fund, operated by the European Commission, would issue bonds with the joint guarantee of all EU member states, Le Maire said.

He declined to specify any targeted amount for the fund, but said it could be financed through a special "solidarity tax" or national reimbursements.

"Europe needs solidarity. Solidarity means common financial means... Solidarity means to be able to pool our resources to cope with the aftermath of the crisis," he said.

The pandemic had also underlined the need for Europe's economic sovereignty, he said, to reduce its dependence on other countries for strategic goods and services.

"This pandemic is a unique occasion to reflect collectively on how to reorganize value chains and how to relocate some key activities. It is a unique occasion to reflect on the necessary investments for the health sector and how to better protect our borders."

"We should not be scared of the word protection," he added. "Protection is not the same as protectionism. Protection is a legitimate defense of our most strategic economic assets."

Le Maire also said it was time for a new European industrial policy.

"With this crisis the European Union has a historical opportunity to become an economic and political superpower between the United States and China. The EU should seize this opportunity and seize it right now."

But Europe also has a responsibility to help prevent tragedy in developing countries yet to feel the brunt of the outbreak, especially in Africa.

France would support the creation of special fund of about $500 billion, Le Maire said, as well as a moratorium on debt for the poorest countries.