Costa wants new money and eurobonds for EU to do its job – economy


The Prime Minister considers that the European Union needs and must “finance the rather asymmetric impact” of the crisis taking shape in Europe, and in the world, and argues that the “best evidence” of the harmful effects of never having concluded the economic union and monetary is the “high price” that several Member States will pay. After the leader of the Left Bloc, Catarina Martins, defended the importance of issuing joint debt by the EU and direct financing from the European Central Bank to the Member States, considering that the mere easing of budget rules is insufficient, António Costa took advantage to make harsh criticisms of Brussels.

The prime minister noted that at the “first sign of crisis, the markets immediately reacted in the worst way”, referring to the escalation of interest on public debt on the secondary market.”The ECB’s reaction was very positive, which made it possible to control this drift of a new risk of sovereign debt crisis,” said Costa, who shortly afterwards criticized the “awkward phrase by Ms. ECB President”, Christine Lagarde, who accentuated this rise in interest when he argued that it was not the ECB’s mission to intervene in debt yields.

“But it is not enough,” he said, recalling that the € 37 billion initiative launched by the European Commission represents nothing more than the “possibility of reprogramming what are already allocated funds”, in the Portuguese case, to projects foreseen in PT2020.

The leader of the PS maintains that an “answer now” is needed and, for that, “new money is needed to respond to the increased costs” that countries have, right from the start to finance their national health systems.

“This is a common problem across the EU and that is why we have to have a common response across the EU,” he continued, considering that Europe must have “economic muscle” to respond to the crisis.

The possibility of joint debt issuance, through so-called eurobonds or, more recently, coronabonds (specific debt securities to finance the response to the pandemic), is, according to António Costa, “symbolically very important” as it would pass a “very strong political message” and capable of not leaving countries isolated and at the mercy of market distrust in a context of reinforcing public indebtedness.

Admitting further that the “flexibility” already ensured by Brussels with regard to the rules of budgetary discipline “helps in an emergency”, Costa maintained that a second moment will come later concerning the “medium and long term” for which it will certainly be necessary “a major investment program on a European scale”.

This program can be called Marshall or Ursula von der Leyen (name of the president of the European Commission), it can have the “name they want”, since for Costa the central issue is that this plan is necessary and must be “intelligent” because it is designed to respond to the main challenges facing Europe, starting with the environmental and digital transitions.

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