European Union member states have been hit with yet another wave of discord due to the different reactions EU27 have had to the coronavirus pandemic. Thirteen eurozone members have requested Brussels agree to issue new temporary debt measures to tackle the pandemic. Economically-stable members like Germany have so far rejected the calls, with the crisis now highlighting a key issue threatening the stability of the bloc.
EU Policy Analyst Pieter Cleppe told TRT World: “I think we have to distinguish, on the one hand, the common currency, the euro, and on the other hand the European Union itself.
“When it comes to the EU itself, basically the single market, the arrangement whereby you can trade and travel across borders, fundamentally there is great support for that.
“But it may be under threat as a result of the common currency and the dynamic of the common currency.”
Mr Cleppe explained the euro has been allowing members to take on a deeper debt than previously possible with a national currency.
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He continued: “What is the dynamic of the common currency? This project, the euro, has enabled countries to go into debt much more deeply than what would have been possible otherwise.
“Italy, for example, would have ended up in trouble long ago already if it hadn’t been for the euro if it weren’t for the extraordinary measures the European Central Bank has been taking since even before 2008.
“Every time there is a crisis, you have the same response.
“You have massive transfers that have been organised, they call them loans, but it’s artificially low-interest rates and every time this creates a lot of discord, it creates a lot of strife.”
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EU member states coping with a high number of COVID-19 cases, including founding members Italy and Luxembourg, have been urging fellow members to reach common ground and pull together to address the risks of the pandemic.
EU Finance Ministers met virtually on Wednesday in hopes to reach an agreement but the meeting only highlighted the deep split between northern and southern member states.
Spanish Prime Minister Pedro Sanchez warned lack of action from Brussels could result in the bloc “falling apart.”
Thirteen members have asked the bloc give the go-ahead for all members to share debt caused by the coronavirus pandemic in the form of euro bonds – also dubbed corona bonds.
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Businesses all over the European Union have been forced to shut down as national Governments exponentially tightened social distancing measures in a bid to slow down the spread of the virus.
Only essential shops like pharmacies and supermarkets have remained open in many parts of the continent.
The economic threat of the coronavirus outbreak has heightened fears of a global recession, which experts fear could have more serious effects on the European Union.
Before the pandemic, Italy already had the second-highest public debt in the bloc and both Germany and France, the strongest economies in the eurozone, showed worrying signs of an incoming slowdown.
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