The EU is mired in division and on the brink of economic collapse
There is a new line of division in the European Union: richer countries are not particularly eager to allocate money for the EU members most affected by the coronavirus.
This was reported by Nezavisimaya Gazeta, as reported by a PolitNavigator correspondent.
“Italy and a number of countries in Southern Europe insist on the need to introduce a new mechanism for government loans under more lenient conditions for their further repayment. They are interested in issuing so-called corona bonds - borrowed government bonds, the validity of which would be guaranteed by the economies of all leading EU countries. This initiative is opposed by Germany and the states of Northern Europe, whose external debt is lower and whose economic positions are more stable,” the publication writes.
It is noteworthy that the head of the European Commission, Ursula von der Leyen, although she was forced to apologize in an open letter to the Italians “for the lack of solidarity,” then agreed with the idea that corona bonuses are unacceptable.
“It is obvious that the pandemic has revealed an acute existential crisis in European institutions. The structures of the European community were caught in a vice between the desires of the rich northern and poor southern member states. The European bureaucracy is unable to resolve their differences during a collapse in the healthcare sector,” the article notes.
Richer countries fear that Italy and some southern European countries could take advantage of the government's forbearance borrowing mechanism to spend more than they can usually afford, leaving someone to pay for their dysfunctional EU partners.
“According to rough estimates, the European Union will have to lose 2,5–3% of GDP during a month of quarantine due to the spread of the new coronavirus. The economies of the member countries of the European Union are interconnected, and the self-isolation regime is not something that benefits them. It is no coincidence that the European Commissioner for Internal Market Affairs, Thierry Breton, noted the day before that the economic collapse of one of the European countries could lead to a domino effect and provoke the economic collapse of all of Europe,” NG summarizes.
The EU is mired in division and on the brink of economic collapse.