European Union summit Thursday to discuss the economic crisis caused by Coronavirus
The 27 European leaders are studying, in a video conference on Thursday, solutions aimed at lifting the European Union out of the stagnation caused by the Covid-19 epidemic, but final decisions are postponed due to the divisions between the members of the bloc.
In evidence of the seriousness of the crisis, the European Union, whose population has been under quarantine since late winter, is expected to record a 7.1 percent drop in its gross domestic product this year, according to the International Monetary Fund.
Likewise, the crisis threatening the 19 eurozone countries may be the worst since the launch of the single currency in 1999.
Nevertheless, the countries of the Union do not seem able to overcome their differences on the way to launch the economy again, while the old differences that resulted during the 2009 financial crisis have returned to the fore.
The countries of the south that have been hit hard by the epidemic, such as Spain and Italy, are calling for more financial solidarity from their northern neighbors.
However, Nordic countries like Germany and the Netherlands, who are least affected by the virus, are reluctant to pay to countries that take on them not to show discipline in their budget during the years of recovery.
A senior European official considers that “the countries of the South have the impression that some countries, which are currently the most economically powerful, will take advantage of this crisis to gain more.
As for the countries of the North, they believe that their neighbors in the South want to take advantage of the epidemic crisis to push them to alleviate the debt burdens they committed to in the past, calling for “avoiding this misunderstanding”.
Contrary to usual, the European Union countries will not adopt a joint statement at the end of the summit, as a European official told France Press, in evidence of the depth of the divisions between them.
“I propose to agree to work to establish a recovery fund as soon as possible,” European Council President Charles Michel wrote in his call to heads of state and government.
Within a week, on April 29, the European Commission is due to publish a proposal on the issue of the recovery fund in light of Thursday’s talks.
For its part, the French presidency does not expect to reach an agreement in this regard before the summer.
A French source said that the matter “requires a face-to-face meeting between heads of state and government, and we are not currently able to hold it”.
European parties agree that the value of the recovery plan will be in the hundreds of billions of euros, but the exact amount has yet to be determined.
Various options were presented on the thorny issue of funding for the recovery fund, none of which has yet been unanimous.
Rome, Madrid and Paris are calling for this financing to be in the form of a joint debt, under several umbrellas, often referred to as “Corona Bond”.
The countries of the South benefit from the sharing of debts from the lower interest rate in the countries of the North known for their strictness in budgetary matters.
It also raises the question of the link between the recovery fund and the EU budget in the long run, which is supposed to be approved by the end of the year for the period between 2021 and 2027.
The budget reassures the Nordic countries because it would provide a legal framework for the bailout plan, but that raises other more complex questions, such as the extent to which post-crisis investment expenditures are superior to conventional expenditures similar to the CCA fund, for example.
The last negotiations on the shared budget failed last February, before the health and economic crisis.
It remains to be seen that the division is clear between two camps that hold on to their positions.
The first is the financially stricter Nordic countries, and the South and East countries, which support the Common Agriculture Policy and Cohesion Policy (which provides aid to the less developed regions).
