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- Interview.Wopke Hoekstra: "We do not want Eurobonds, but we agree on solidarity measures"
After 16 hours of meeting, a sleepless night and a lot of tension, the President of the Eurogroup, Mario Centeno, has ended the meeting of the Ministers of Economy and Finance of the EU. Without agreement, with a bad taste in the mouth but with the hope that the work done in the last days will allow the first great package of coordinated measures against the effects of the Coronavirus to be finalized tomorrow, Thursday.
"We are close to an agreement, but we have not yet reached it. I have suspended the Eurogroup and we will continue tomorrow Thursday. My objective remains the same: a strong safety net in the EU against the hit of the virus to protect workers, companies and countries and a commitment to a major recovery plan, "explained the Portuguese minister. "After 16 hours of negotiation, there is no agreement for the economic response. We will continue tomorrow. Together with my colleague Olaf Scholz , we appeal to all European countries to rise to the exceptional challenges to achieve an ambitious agreement," he said. its part the French Bruno Le Maire . "In these difficult hours, we have to be together. Together with Bruno, I ask all members of the Eurozone not to refuse to resolve these difficult issues and to allow a good compromise for all citizens," said the German for his part.
None mentions them, but all the messages are for Rome and The Hague . It is the clash between the two countries that has made a consensus text impossible, a guide with the basic parts of a plan to be sent by letter to the President of the European Council, Charles Michel, so that he can summon the heads of state and government. so they can approve any decision. Everyone expected something, a transfer everywhere, but given the impossibility of closing the gap and with the accumulated fatigue and the fact that there were some with important appointments with their governments, they have opted for a temporary suspension and continue within 24 hours.
The night has been long and difficult. The Eurogroup started at 4:00 p.m. on Tuesday and at 7:00 p.m. there was a recess that lasted almost five hours. Attempts were made to smooth things over with small group or bilateral teleconferences , articulating a new text, but the differences were too great. The objective, as Centeno points out, was a double plan. On the one hand, define a first short-term 'safety net' that covers States, companies and employment. It would and will be done through reinforced credit lines of up to 250,000 million euros for governments, using the Mede , the eurozone rescue mechanism. Another 200,000 million in financing and liquidity for companies through the European Investment Bank . And another 100 billion , if necessary, for the workers. Through the Sure, the fund that the European Commission proposed last week so that the States can obtain quick, advantageous loans and with almost no conditions to support employment, covering Erte and similar strategies.
The second leg, the most difficult, is reconstruction. A Marshall Plan , a Solidarity Fund, a Reconstruction Fund, a new Multiannual Financial Framework (the EU Budget for the period 2021-2027). Many options, many names, for a common goal, at least in theory. A coordinated reaction of the 27 to prevent the most affected countries, and which are also the most vulnerable in their public accounts, on the deficit or debt side, which is close to 100% in the case of Spain and exceeds 130% of GDP in that of Italy.
The positions, however, have not moved enough. Italy, due to a fierce internal fight, has serious problems with the Mede. It has become a toxic instrument, associated with the loss of sovereignty by criticism of La Lega. Giuseppe Conte said Monday night that "it was not the right instrument" and demands coronabonos , eurobonds, a fund that uses pooled debt to share the burden over the next five years. Maybe not right now, but soon.
The Netherlands accepts solidarity, but wants the credit lines to the countries, through the Mede, to have some kind of conditionality . Don't bail them out with a macroeconomic adjustment program and the Troika , like the ones of the past decade. But some kind of supervision and reform program. And, along with Germany, Austria or Finland, it absolutely refuses to eurobonds. Accept the idea of a Reconstruction Plan, but not financed with north-south transfers.
Spain accepts a midpoint
The objective is for there to be a transfer at both ends and to be in the middle. France and Germany were there. Spain, according to European sources, was reasonably satisfied with a proposal at dawn. Or he could live with her . But Rome and The Hague, no. They are the ones that have stood out the most in recent days, the ones that have been under more pressure from their parliaments. Conte prefers to tighten the rope as much as he can now, when there is public pressure on ministers and leaders. He knows that if he renounces the joint response now, and resigns himself to having only the Mede for emergencies, he will have a very difficult time with his electorate. The Dutch do the same, but the other way around, and they also have doubts about the unemployment reinsurance program, the Sure, because they do not want it to be a pure embryo of a total benefits system, but to have a short-term nature just to this crisis.
"It is too early for an agreement on the whole package. This is mainly a health crisis. It is important for Europe to make extra money available for this," Netherlands Minister Wopke Hoekstra explained on his Twitter account . "The Netherlands was, is and will be against Eurobonds because they increase the risks in Europe instead of reducing them. In addition to being reckless, it is not reasonable either; in that case, my country should guarantee the debts contracted by others. Most of Eurozone countries support this line. To the extent that the Mede is used to provide economic support, we believe that it is prudent to link it with the adoption of economic measures. We will continue to talk to each other because we must face this crisis together, "he concluded. .
The role of heads of state and government
There were proposals during the night to leave issues open and pass the ball back to the leaders so that they are the ones to give the final touches, but the issue was too delicate, according to several ministers. And they preferred to be them, those who have more control over the technical work, the people in charge, and not leave in the hands of their bosses issues that require a fit of many pieces. It is one of those agreements in which nothing is closed until everything is closed, and one party may appear to be settled, but reopen at the last moment if concessions are made in another. The sources consulted suggest that it is more a matter of language, not so much of political content.
Although it may seem that the differences are irreconcilable, to the point of forcing a 24-hour suspension, in reality the discrepancies are due to the way in which the document is presented to the heads of state and government , who could reopen the melon if they wanted. from them. The fund is totally content, on how far to go, but the consensus is that everything will be articulated on those two lines: a safety net now, immediate, and a reconstruction plan later. Every word, every expression, every commitment is vital within the technical and procedural functioning of the EU. From the outside it seems silly, with a big recession in the immediate future, but for those involved it is their own safety net. There may be fights, political and media fights, but they know that if they hold onto their mechanisms there is hope.
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