Coronavirus sends European economy in tailspin

US, WASHINGTON (ORDO NEWS) — European leaders argue about how to get their economies out of the coronavirus crisis, as Italy has blamed other member states for not responding decisively to an unprecedented economic shock.

Having met in a video conference format, 27 EU leaders hid their serious disagreements, agreeing that it would take another two weeks to discuss ambitious economic recovery plans. After a heated debate on the “coronabond,” that is, on raising funds through the issuance of joint European bonds, the block postponed this issue until later, urging the EU finance ministers to submit their proposals for two weeks.

Although the virtual summit was still ongoing, Italian Prime Minister Giuseppe Conte made a statement rejecting the previously prepared draft declaration because he considers it an ineffective response to a crisis of this magnitude.

A few hours before the summit, Conte called for “extraordinary and exceptional measures” to help the affected European economy cope with the sharp recession and expected surge in unemployment caused by coronavirus.

Italy, supported by France, Spain, and seven other Eurozone countries, offers to issue “European bonds to finance the recovery” or “coronond bonds” – that is, EU-backed debt instruments that would allow member states to recover from the recession and increase health care contributions.

But the idea of ​​issuing joint bonds remains unacceptable for Germany, Austria and the Netherlands, which several years ago abandoned the similar idea of ​​issuing “Eurobonds” during the eurozone crisis.

During a top-level video conference — the third in the past few weeks — negotiations took place four hours longer than planned, as leaders argued over one paragraph of the communiqué about the most effective measures that needed to be taken to help their economies.

After the meeting, President of the European Council Charles Michel told reporters that the EU was ready to do “everything possible to find the right solution” and should continue to work with 19 eurozone finance ministers. “Today we had a fierce political debate. It was a useful discussion, it was a necessary discussion, ”he said.

But the hope of a breakthrough is still illusory, as finance ministers of the eurozone countries earlier this week were not able to agree on the issue of common European bonds – postponing this issue on Thursday, to which the meeting of EU leaders was scheduled.

As Italy’s economy is “in a tailspin” due to the country’s internal isolation to fight the epidemic, Conte presented the second set of economic stimulus measures adopted in March for more than 25 billion euros. But the additional costs will lead to the fact that the government will jeopardize budget deficit indicators.

However, EU leaders were able to unite around the idea of ​​closer monitoring of foreign investment to protect Europe’s “strategic assets”. This decision was made a few days after the German government said it had rejected the Donald Trump administration’s bid to buy the German medical company developing a vaccine against the coronavirus infection COVID-19.

The European Union also said that they give priority to finding a vaccine for all those in need “without geographical barriers”, promising to increase funding for research.

In addition, EU leaders agreed to create a “more ambitious and widespread crisis management system within the EU.” The EU already has an emergency response focal point that works around the clock and can arrange assistance upon request if any country suffers from an earthquake, forest fire, flood, or pandemic.

Earlier in the day, European Commission President Ursula von der Leyen  that they are in the early stages of the crisis “only care about themselves.”

Unusually critical, she stated that the history of the past few weeks has been somewhat painful.

“When Europe really needed a spirit of unity,” all for one, “too many were” only for themselves. ” And when Europe really had to prove that it is an alliance not only under favorable circumstances, when everything is cloudless, too many initially refused to “let others under their umbrella”.

MEPs were first advised not to attend the meeting and were allowed to vote electronically.

Von der Leyen had in mind a ban on the export of essential medical supplies, as well as closure of borders, which led to massive delays in the delivery of food and medical products in all countries of the European Union.

However, she further stated that Europe is now “stepping up”, noting Germany’s decision to deliver French and Italian patients to German hospitals, as well as similar assistance that Luxembourg will provide to France.

The Commission also tweeted statistics that France and Germany combined donated more surgical masks to Italy than China.

EU leaders are increasingly worried that they are losing the “propaganda struggle” after Russia and China rushed to Italy’s aid, and European neighbors from the very beginning were unable to respond to Rome’s calls for help. Earlier this week, EU High Representative for Foreign Affairs and Security Policy, Josep Borrell, wrote that there is a “struggle for influence through propaganda … a policy of generosity.”

But a von der Leyen team memo emphasized concerns about the heterogeneity of the EU response. The document regrets that, as a result of border closures, transportation was paralyzed, which led to the fact that trucks were forced to wait in line for 24 hours at the EU’s internal borders, and these problems are most acute in Central Europe.

The commission’s council to create “green stripes” (with minimal checks) to accelerate traffic so far only three countries have followed.

On the day the EU celebrated the 25th anniversary of the entry into force of the Schengen Agreement, which calls for the abolition of internal borders between most EU countries, all EU member states, with the exception of Ireland, have closed their borders or imposed restrictions on their crossing. “A crisis without borders cannot be resolved by establishing barriers between us, but this was precisely the first reaction of many European countries,” said Von der Layen.

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The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.