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07 April 2020A meeting of the Eurogroup Finance Ministers will take place two weeks at the latest summit of European heads of government, which failed to find an agreement on the means to revive the economy of coronavirus-ridden countries.

The proposals on the table are four, but only on one, the fourth, there is a disagreement: it is the hypothesis of a common debt issue to finance a recovery fund. Like the "Corona bonds" proposed by Italy.

The three proposals on which there is a substantial agreement are: 1) the use of a new line of credit from the Fund to save States, but with a "conditionality" that is as light as possible (without 'troika', Angela said Merkel), which is worth just over € 400 billion; 2) support from the European Investment Bank for the liquidity of private companies in the order of 200 billion euros; 3) the "Sure" device, a measure proposed by the European Commission to support, with loans of up to € 100 billion in total, the redundancy mechanisms of all EU countries. Altogether there are 500 billion, to which must be added the interventions of the ECB.

The two weeks that the leaders had given to the Eurogroup to develop a "solid" economic plan served to make progress on several fronts, but not to overcome the biggest obstacle.

The positions on the field are basically three. The first is that of the "Nordic front": six or seven countries including Holland, Finland, Denmark and Austria, which could accept the first three proposals, but do not want to hear about debt mutualisation, a Eurobond or a "Corona bond". ", and they urge that these hypotheses are not even mentioned in the EU documents.

The second position is that of countries in favor of some form of Eurobond, which would not concern the previous debt, but only the one needed from now on, to repair the damage caused by the pandemic crisis and support the recovery of the economy. Italy, Spain, Portugal, Ireland are in this group, supported by France which is trying to mediate with Germany. These countries are unwilling to accept a Eurogroup package containing only the first three proposals.

The third position is that of Germany, which has abandoned the intransigence of the Nordic front, with a timid opening to the common debt instrument. However, an opening that basically consists of a temporary tactic: the Germans, in essence, would like the discussion on this point, or the fourth element of the Eurogroup package, to be simply postponed to September or October. In the meantime, approving everything else.

At the press conference at Palazzo Chigi, Prime Minister Giuseppe Conte disagrees. "Mes no, Eurobond absolutely yes", he summarizes by answering a question. The Save States Fund "is an absolutely inadequate instrument", while "Eurobonds are the appropriate solution to the emergency we are experiencing". Conte points out that, on this issue, there is full harmony with the Minister of Economy Roberto Gualtieri. On the opposition to the Mes, "when we started to discuss, some, but not Minister Gualtieri, suggested to me not to do this battle, which seemed futuristic and futuristic - explained Conte -. But the truth is that when you defend your own Country no calculations are made. " On this, "I'm sure the story is with us," he added.

Germany, through the Foreign and Economic Ministers, Heiko Maas and Olaf Scholz, try to reassure: "We don't need troika, controllers, a commission that develops reform programs for a country, but fast and targeted aid - they write in a letter - Exactly this is what the Mes can offer, if we adapt it in a reasonable way ". But Holland has only made a half effort: it is willing to accept that the conditionality for the countries that will resort to the Mes is "lightened", but only in the first phase. Later in a second phase, the Dutch believe that it will still be necessary for the countries supported by the Mes to return to "financial sustainability". Which, in the language of Mes, means the return of the Troika.

Yesterday, the French finance minister Bruno Lemaire proposed a mediation that has the advantage of looking a lot ahead, even with respect to the coronavirus crisis. It is a "three to five years" solidarity fund, and should issue debt securities on the markets, with common guarantees, to mobilize loans that could reach 3% of the total EU GDP, in the form of loans. long-term (15-20 years) at very low rates. According to the French proposal, the sectors to which these investments would go are three: first of all, Lemaire, the health system, has listed; second, the economic sectors which are at risk of collapse due to the "lockdown", such as "the aeronautics, the automotive sector, tourism and civil aviation"; third, new technologies, a field in which, without the intervention of the state "there is a risk of losing the great strategic battle of the 21st century facing China and the United States".

In this situation, with these divisions on the ground, it is easy to predict that the Eurogroup will end up without agreement. In which case, in all probability, the ball will pass again to the European Council, which could take place after Easter. For the moment the Eurozone has its shoulders covered by the ECB. The purchase program started with six billion a day, 133 a month, against the 83 billion initially expected.
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