Congratulations, it’s a fudge: EU crisis deal leaves much unresolved

BRUSSELS (Reuters) – EU finance ministers gave themselves a round of applause as they wrapped up talks on Thursday night with agreement on a package of measures worth half a trillion euros to cushion the blow of the coronavirus pandemic.

 
Their deal was a classic European Union fudge, however, and it left unresolved the most contentious question of how to share the financial burden that has so bitterly divided them.

French Finance Minister Bruno Le Maire said that after 16 hours of “brutal” inconclusive negotiations earlier in the week, the ministers realised they were “standing at the edge of the abyss and what is at stake is quite simply the construction of Europe”.

While Paris and Rome said the agreement paved the way for issuing common EU debt to kickstart economic growth on the continent headed for a steep recession, The Hague and Berlin said no “coronabonds” will happen.

The art of the EU deal lies in ambiguous language that leaves the matter open to further arm-wrestling between the divided member states, whose national leaders will meet via videoconference on April 23.

“Way too early to celebrate the Eurogroup’s deal,” Mujtaba Rahman, Eurasia Group’s managing director for Europe, said in a research note that predicted a flare-up over the undecided details when it comes to implementing the package of measures.

The agreement includes almost unconditional use of the euro zone’s European Stability Mechanism (ESM) bailout fund for loans to governments, a scheme to subsidise wages so that firms can cut working hours rather than jobs, and a plan for the European Investment Bank to step up lending to companies.

INTO LONG GRASS

However, the ministers kicked into the long grass the question of how to pay for a temporary recovery fund for Europe because it goes to the heart of a disagreement over jointly issued debt.

This has been the stumbling block all along, pitting a camp of financially ailing southern states led by Italy against the Netherlands as the bulwark of the fiscally conservative north.

 
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Πηγή: reuters.com