STA, 25 March 2020 - Nine EU leaders, including Slovenia's Prime Minister Janez Janša, have called for eurozone countries to jointly issue debt in order to fight the devastating impact of coronavirus on the European economies. The leaders presented their idea in a four-page letter addressed to President of the European Council Charles Michel.
The leaders of Belgium, France, Greece, Ireland, Italy, Luxembourg, Portugal, Spain and Slovenia propose in the letter "a common debt instrument issued by a European institution to raise funds on the market on the same basis and to the benefits of all member states".
They believe this is necessary for "ensuring stable long term financing for the policies required to counter the damages caused by this pandemic."
"The case for such a common instrument is strong, since we are all facing a symmetric external shock, for which no country bears responsibility, but whose negative consequences are endured by all. And we are collectively accountable for an effective and united European response."
The common debt instrument should have sufficient size and long maturity to be fully efficient and avoid roll-over risks now as in the future, the leaders argue.
The idea of a mutualised debt is a frequent request of heavily indebted EU nations and is championed by the European Central Bank, but Germany and other rich northern members, which usually carry the biggest part of the burden in such projects, oppose it.
France, Spain and Italy have long called for some kind of eurobond, that is in effect joint borrowing by the 19 members of the euro single currency.
They say it could serve as the bedrock of a safer and more unified European economy and would become a globally respected asset on par with the US Treasury bills that help make the dollar the world's reference currency.
EU leaders discussed the possibility of an EU "corona bond" to finance urgent measures and help deal with the consequences of the epidemic at a videoconference last week.
In today's letter, EU leaders say the coronavirus pandemics "is an unprecedented shock and it requires exceptional measures".
All European countries have taken or are taking containment measures to stem the spread of the virus, but the success of these measures will depend on the timing, the extent and the coordination of sanitary measures implemented by different governments, they say.
They urge "an alignment of practices across Europe, based on past successful experiences, on experts' analysis, on thorough exchange of information".
"This is necessary now, during the peak phase of the epidemic... It will also be necessary tomorrow when we will roll-back the extreme measures taken today, both to avoid too hasty a return to normality and to prevent re-importing the virus from other countries."
The leaders are calling on the European Commission to "come out with agreed guidelines, a common base for the collection and sharing of medical and epidemiological information, and a strategy to deal in the near future with the staggered evolution of the epidemic".
Preserving the functioning of the single market is essential to give all European citizens the best possible care and the strongest guarantee that there will be no shortage of any kind, the letter reads.
"We need to recognize the severity of the situation and the necessity for further action to buttress our economies today, in order to put them in the best condition for a rapid recovery tomorrow. This requires the activation of all existing common fiscal instruments to support national efforts and ensure financial solidarity, especially within the eurozone."
EU leaders are expected to hold a video conference on Thursday, where they are expected to greenlight a pandemic crisis instrument to help European countries with precautionary loans from the European Stability Mechanism.