Europe could fall, Italy warns as divided EU seeks coronavirus rescue deal

[webfact]

Europe could fall, Italy warns as divided EU seeks coronavirus rescue deal

By Jan Strupczewski and Gabriela Baczynska

 

A man wearing a face mask walks past the European Commission headquarters as the spread of coronavirus disease (COVID-19) continues in Brussels, Belgium April 9, 2020. REUTERS/Yves Herman

 

BRUSSELS (Reuters) - The European Union faces an existential threat if it cannot come together to combat the coronavirus crisis, Italy said on Thursday as the divided bloc sought to salvage talks on a rescue package to aid battered economies.

 

A deal has so far proved elusive amid fraught discussions between the more fiscally conservative north and the indebted south, which has been hit hard by the pandemic and is pushing for unprecedented measures like issuing joint EU debt.

 

Sixteen hours of talks between EU finance ministers on a half-a-trillion-euro package collapsed on Wednesday. They were due to resume at 1500 GMT on Thursday to push for a deal to help governments, companies and individuals through a deep recession the pandemic is expected to cause in Europe this year.

 

"It's a big challenge to the existence of Europe," Italy's Prime Minister Giuseppe Conte told the BBC. "If Europe fails to come up with a monetary and financial policy adequate for the biggest challenge since World War Two, not only Italians but European citizens will be deeply disappointed," he said.

 

For weeks, the EU has struggled to show a united front in the face of the pandemic, with the 27 member states squabbling over economic rescue plans, medical supplies and border curbs.

 

France and Germany are pushing for a compromise to break the deadlock, but budget hawk Austria said that, while it was willing to make concessions, the contentious "euro bonds" remained a no-go for Vienna.

 

"That is out of the question for us," said Finance Minister Gernot Bluemel.

 

A senior EU diplomat said the risk was growing that the finance ministers would just patch up divisions for the sake of announcing a deal, but would leave the key unresolved issues to national leaders.

 

"There is a lot of pressure for an agreement today," said the diplomat. "Germany and France are pushing for it. But it's not easy ... we may be heading for a formal agreement that doesn't really solve much in practice."

 

STICKING POINTS

The package under discussion would bring the EU's total fiscal response to the epidemic to 3.2 trillion euros, the biggest in the world. But it includes contentious elements that expose deep divisions among countries on sharing the financial burden of crises, bringing back bitter disputes and mistrust from the sovereign debt crisis of 2010-2012.

 

Another problem is agreeing conditions under which euro zone governments could access cheap credit from the euro zone bailout fund, the European Stability Mechanism (ESM).

 

Italy, and most other countries, is ready to accept very light conditions, but the Netherlands wants stricter rules, including country-specific economic criteria, which is politically unacceptable for Rome.

 

"It's important that we take this decision today on the 500 billion euros that is in discussion - that's an incredibly large sum of money that we could use to help a lot of people, especially in the hardest hit countries, Spain and Italy," German Economy Minister Peter Altmaier said.

 

Other elements of the package being discussed are more guarantees for the European Investment Bank to back up companies and a scheme to help subsidise wages across the bloc so that companies can cut work hours, not jobs.

 

But a separate plan to finance the recovery, after the epidemic, raises more questions. France and the southerners wants the money - possibly up to 3% of EU GDP, or more than 400 billion euros - to be borrowed jointly on the market by all EU states.

 

This is a red line for Germany, the Netherlands, Finland and Austria which strongly oppose joint debt issuance, even in such an emergency as the coronavirus pandemic.

 

The ministers might end up side-stepping the problem by just mentioning the need for a recovery fund and asking the 27 national leaders of the bloc to decide on how to finance it.

 

(Reporting by Jan Strupczewski, Michelle Martin, Gabriela Baczynska, Francois Murphy; Editing by Catherine Evans, Nick Macfie and Pravin Char)

 

-- © Copyright Reuters 2020-04-10

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[ukrules]

The fall of the EU, I've heard this said before, recently.....

 

It will happen, it's just a matter of when. This ongoing crisis will accelerate the inevitable.

[JonnyF]

I thought the EU would crumble within the next 10 years anyway. It looks like their failure to take appropriate action re. the virus will speed that up. If Italy goes the house of cards will tumble and 67% of Italians currently believe they'd be better off outside the EU.

 

It's a flawed model, a protectionist racket and fundamentally undemocratic. I will be glad to see the back of it and return to sovereign nation states trading freely and cooperating with each other. 

[ExpatOilWorker]

I thing a much stronger and united EU will emerge from the Corona crises,  especially with Brexit now well behind them.

Good luck to the EU and get well soon.

[brokenbone]

let the pigs pay their own expenses for a change, go dutch

[AhFarangJa]

Best news to come out of this Corona thing yet. Let all those fat overpaid EU Ministers find the trough dry up. Mind you, they have probably already sorted the pay offs and pensions between themselves.

[Crazy Alex]

Wow, this EU thing just doesn't seem to be working out. As with most things political, the losers come begging for or demanding money from those who planned more and produced more. Sounds like a gravy train for losers and punishment for the winners.

[nausea]

Sad, as I'm a great believer in Kardashev's theory. Whatever it's faults, a united Europe is one more step on the way to a Type 1 civilization. The fact billions of people still live in poverty, given we have the means to cure it, is a shame on the human race. But, I guess, we're still in thrall to the master/slave dialectic. The current pandemic just highlights the problem - in the third world on a survival level; in the West nobody starves, the slavery takes a different form.

[Rookiescot]

The nations within the EU have an opportunity to see what happens when a country leaves the bloc by watching what happens to the UK.

I think most of them will decide remaining within the EU is a good idea. 

[Crazy Alex]

3 minutes ago, Rookiescot said:

The nations within the EU have an opportunity to see what happens when a country leaves the bloc by watching what happens to the UK.

I think most of them will decide remaining within the EU is a good idea. 

Depends on whether each individual nation deciding is a moocher nation or producer nation.

[Borzandy]

2 hours ago, webfact said:

Europe could fall,

Great suggestion.

[Borzandy]

10 minutes ago, Rookiescot said:

The nations within the EU have an opportunity to see what happens when a country leaves the bloc by watching what happens to the UK.

I think most of them will decide remaining within the EU is a good idea. 

watching what happens to the UK, what happen???  what happen could you lighten me.

[Aforek]

Agreement signed : 500 billion euros 

I still believe in EU ; it's a good challenge to see how united they are 

[jaiyen]

4 minutes ago, Aforek said:

Agreement signed : 500 billion euros 

I still believe in EU ; it's a good challenge to see how united they are 

Read the article and you will see just how united they are !   Glad UK is getting out.  

[mauGR1]

49 minutes ago, brokenbone said:

let the pigs pay their own expenses for a change, go dutch

We love you too

[nobodysfriend]

If they want a unified Europe , they should agree to the ' Corona Bonds ' .

 

This is a special situation , some countries alone will not be able to bear the consequences .

 

 

 

 

 

 

[JonnyF]

45 minutes ago, Rookiescot said:

The nations within the EU have an opportunity to see what happens when a country leaves the bloc by watching what happens to the UK.

I think most of them will decide remaining within the EU is a good idea. 

They'll also have an opportunity to see what happens when a country stays in the EU while Germany and France are in deep recession and the UK has left (they are the top 3 net contributors, number 4 is Italy!). Tell us again how the EU will be just fine without a trade deal with the UK.

 

Oh yeah, and they can't even agree on a rescue package for COVID-19. Compare that to the UK who were able to act quickly and decisively without a second thought to what the EU thinks about it. We got out just in time.

 

https://www.theguardian.com/business/live/2020/apr/08/insurers-cut-dividends-bank-of-england-payouts-coronavirus-covid-19-crisis-aviva-legal-general-business-live

 

[nobodysfriend]

3 minutes ago, JonnyF said:

Compare that to the UK who were able to act quickly and decisively without a second thought to what the EU thinks about it. We got out just in time.

UK reacted slowly ( herd immunity ...) .

NHS has been demolished in recent yrs , and now the UK can't count on much support of other European countries any more ...

[JonnyF]

23 minutes ago, nobodysfriend said:

UK reacted slowly ( herd immunity ...) .

NHS has been demolished in recent yrs , and now the UK can't count on much support of other European countries any more ...

What support? We were a net contributor, meaning we were supporting them not the other way around.

 

Look at the top 4 contributors to the flawed experiment.

 

 

Germany, deep recession.

UK, departed 2 months ago. Phew.

France, deep recession.

Italy, 67% of the population believe they'd be better off outside the EU.

 

They can't agree on the budget, and they can't agree to the COVID-19 rescue package.

 

The ship is sinking, but fortunately the UK already left and is half way towards the shore. You won't want to be a part of it when that house of cards comes tumbling down, believe me.

 

[bert bloggs]

2 hours ago, Rookiescot said:

The nations within the EU have an opportunity to see what happens when a country leaves the bloc by watching what happens to the UK.

I think most of them will decide remaining within the EU is a good idea. 

well the ones who just take but dont put in will want it to go on .???? oh and those working in Brussels ,they want the gravy train to keep going.

Edited April 10, 2020 by bert bloggs

[thaibeachlovers]

2 hours ago, nausea said:

The fact billions of people still live in poverty, given we have the means to cure it, is a shame on the human race.

We don't have the ability to solve it. No matter how much money is thrown at countries with the poor, they never seem to improve. I have a theory as to why, but perhaps at another time, when western countries are not following policies guaranteed to ruin their economies.

[Aspaltso]

4 hours ago, ukrules said:

The fall of the EU, I've heard this said before, recently.....

 

It will happen, it's just a matter of when. This ongoing crisis will accelerate the inevitable.

Looks like it'll be the countries in the Eastern Bloc who will be first to go i.e Poland, Hungary, Czech republic. They've made no bones about how they don't like how the EU is being run, and have resisted many of the measures about immigration, and other things being enacted. This crises will speed up the process.

[jollyhangmon]

7 minutes ago, Aspaltso said:

Looks like it'll be the countries in the Eastern Bloc who will be first to go i.e Poland, Hungary, Czech republic. They've made no bones about how they don't like how the EU is being run, and have resisted many of the measures about immigration, and other things being enacted. This crises will speed up the process.

 

... 555, good riddance then!

 

[JonnyF]

1 hour ago, Aspaltso said:

Looks like it'll be the countries in the Eastern Bloc who will be first to go i.e Poland, Hungary, Czech republic. They've made no bones about how they don't like how the EU is being run, and have resisted many of the measures about immigration, and other things being enacted. This crises will speed up the process.

I doubt it. They are the ones who are getting back way more than they pay in. It's a free lunch for this lot.

 

 

[Anant72]

“It's a flawed model, a protectionist racket and fundamentally undemocratic. I will be glad to see the back of it and return to sovereign nation states trading freely and cooperating with each other“

 

The EU is not perfect, far from it, but were (and are Even today) the USA? It is still the best response to war-inducing nationalisms that would inevitably make a comeback. Besides, what could individual countries do in a world where huge and dangerous players, like Trumpist America, China and Russia, would be only too happy to pressure them and to play them against each other, in a divide-and-rule competition. Europhobes are short-sighted. Without EU's financial help many member countries would have collapsed. 

[ExpatOilWorker]

2 hours ago, JonnyF said:

What support? We were a net contributor, meaning we were supporting them not the other way around.

 

Look at the top 4 contributors to the flawed experiment.

 

 

Germany, deep recession.

UK, departed 2 months ago. Phew.

France, deep recession.

Italy, 67% of the population believe they'd be better off outside the EU.

 

They can't agree on the budget, and they can't agree to the COVID-19 rescue package.

 

The ship is sinking, but fortunately the UK already left and is half way towards the shore. You won't want to be a part of it when that house of cards comes tumbling down, believe me.

 

I don't get it!

The brexiteers got their Brexit. Why don't you focus on rebuilding the UK instead of wishing for the EU to fail.

A thriving EU will ultimately benefit the UK.

After all schadenfreude is for people with, well.....small feet.

[sawadee1947]

6 hours ago, ukrules said:

The fall of the EU, I've heard this said before, recently.....

 

It will happen, it's just a matter of when. This ongoing crisis will accelerate the inevitable.

BS. That's only the dream of narrow minded Brexiteers. ????

[hotchilli]

7 hours ago, webfact said:

For weeks, the EU has struggled to show a united front in the face of the pandemic, with the 27 member states squabbling over economic rescue plans, medical supplies and border curbs.

Just think of all those fat cat EU politicians out of work !!!

[vogie]

40 minutes ago, sawadee1947 said:

BS. That's only the dream of narrow minded Brexiteers. ????

When I find myself in times of trouble

Mother Ursula abandons me

 

Edited April 10, 2020 by vogie

[Iron Tongue]

I think covid-19 + immigrant swarms has shown how not united Europe is.  Could take a few years, but the EU is going to be a lot smaller.