The leadership of the European Union took a step Tuesday toward building consensus solutions to deal with the economic downturn caused by the coronavirus pandemic in Europe, hoping to put to one side the divisive debate over whether or not to jointly issue mutually amortized “coronabond” debt instruments, as proposed last week by Spain, Italy and Portugal.
In a video-conference call Tuesday, European Commission President Ursula von der Leyen and other EU leaders discussed putting together an economic recovery stimulus package, modifying the EU budget in order to boost investments and alleviate short-term unemployment problems across the community.
Among measures reportedly being considered is a proposal for an EU-wide unemployment reinsurance fund of around 100 billion euros to support national mechanisms that subsidize temporary layoffs of workers by employers, such as Spain’s ERTE temporary unemployment filings.
Last week, the conservative governments of Germany, the Netherlands and Austria blocked a joint and ambitious proposal made by Spain, Italy, Portugal and others to issue the so-called “coronabonds” that would collectively finance the debt taken on by individual countries to face the crisis of the pandemic.
Inside those northern EU countries, however, the position of the governments against the “coronabonds” scheme has by no mean universal support. Pressure from national Social Democrat and Green opposition parties is building to either support the collective euro-bonds proposal or come up with another jointly financed solution to alleviate EU-wide unemployment and economic dislocation caused by the pandemic.
Von der Leyen is reportedly pushing to make the modification of the EU budget the focus of the economic recovery plan, with the proposal to alleviate temporary unemployment in European countries forming part of package of measures the EU leadership hopes to put forward as an alternative to the “coronabonds” proposal.
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