The European Parliament calls on European government leaders to jointly take on debt to tackle the coronavirus crisis. In a resolution, the parliament requests a comprehensive recovery plan, as well as an increase of the EU multiannual budget for 2021–2027 and the issuance of eurobonds to finance the necessary investments for rebuilding.
In the resolution, the Parliament welcomes the budgetary measures and liquidity support from the EU to face the consequences of the pandemic. Apart from what is already being done, Europe needs a comprehensive recovery and reconstruction package that must be financed by a larger long-term budget (MFF), existing EU funds and financial instruments, as well as "recovery bonds" guaranteed by the EU budget. However, this package should not include mutualization of existing debts, but should be focused on future investments.
The Parliament also emphasizes that the Covid-19 crisis has above all demonstrated the importance of joint European action. The European Union should emerge from this crisis not only stronger but must also have the powers to act in cases of cross-border health threats.
According to Parliament President David Sassoli, the resolution makes clear that the parliament wants to go further than the eurozone finance ministers (Eurogroup). They reached an agreement last week on a short-term aid package of 540 billion euros but could not agree on issuing eurobonds to finance the reconstruction after the crisis, mainly because the Netherlands and Germany blocked it.
The word eurobonds for the recovery fund therefore does not appear in the agreement but is referred to as "innovative financial instruments." A solution to the deadlock is now expected from the government leaders who will discuss the issue next week at a summit via video conference. According to Sassoli, ‘recovery bonds’ are necessary for a solidary solution for the severely affected member states, and the parliament wants the governments to join forces.
In an interview with the British newspaper Financial Times, French President Macron lashed out at the Netherlands and Germany. These two countries are very reluctant for the EU to take on debt obligations. The Frenchman states that eurobonds are needed to help countries like Italy. According to him, attention must be turned to the future. The Netherlands and Germany would be too focused on debts and budget problems from the past. Macron says he is in continuous contact with Rutte and Merkel about the issue. He warns that they must cooperate on a joint solution, otherwise populists will benefit from this crisis.