Italian Prime Minister Giuseppe Conte reiterated demands for controversial pooled debt instruments known as “coronabonds” in an interview with the Sueddeutsche Zeitung (SZ) newspaper this week. He said: “We are experiencing the biggest shock since World War 2, and Europe has to come up with an answer. “The full firepower of the EU is needed, specifically with the issuance of shared bonds.”
Italy has the highest death toll from the COVID-19 outbreak in Europe and is desperately lobbying its partners, alongside Spain and France, for common debt facilities to cushion the economic impact of the virus.
However, the Netherlands and Germany in particular, are opposed to the idea as they see it as potentially putting their taxpayers on the hook for the debt of other countries.
Following marathon talks earlier this month, EU finance ministers agreed an initial coronavirus rescue package worth about €540billion (£472billion), but set aside the coronabonds suggestion.
As tensions between member states are set to rise and fears of a EU collapse grow, in an exclusive interview with Express.co.uk, independent economist Shaun Richards suggested that in order to survive, the bloc needs to go through deep restructuring.
He said: “I suggested doing three eurozones.
“You would have three different groupings, with three different exchange rates.
“In the first tier, you would have Germany and some of its neighbours.
“At the bottom, you would have Italy, Greece and Spain.
“In the middle ground, countries like France.
“That would get some exchange rate flexibility.”
In a different interview with Express.co.uk, former Labour MP and Brexiteer Gisela Stuart also suggested that “multi-speed Europe” could help Brussels.
Back in December, she said: “I think that the tension as you look ahead, is one between countries who have a single currency and ones who don’t.
“And while I do not expect other countries will leave, what I do expect, is that in the years to come within the European Union, there will be a new structure.
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“The euro countries will have to deepen more.
“Other countries like Poland and Hungary, who are not part of the euro, might want to look at different arrangements.
“You have to remember, if David Cameron had come back with a deal that said the EU accepts, not as a matter of exceptionalism and opt-out but as a matter of structure for the future, a different structure for euro countries and non-euro countries, people like me would have said ‘let’s give it another go’.”
Ms Stuart noted: “I think the next Commission will be very important to watch.
“One of the things about the next Commission and Parliament is that for the first time since the introduction of the euro, all the big offices are held by the big member states.
“This is unusual.
“I think there will be new tensions created by those who joined in 2004.”
The concept of a “two-speed” Europe is not new, but has been debated for years in Brussels as a way to solve some institutional issues.
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The concept is that the more members there are in the bloc, the more difficult it becomes to reach consensus on various topics, and the less likely it is that all would advance at the same pace in various fields.
In March 2017, after the Brexit vote, the idea of having different parts of the EU integrating at different levels and space went through a revival.
Encouraged by Mr Macron, former European Commission president Jean-Claude Juncker released a five-point view of possible courses, looking forward to the year 2025.
The points, among which Mr Juncker expressed no preference, “range from standing down from policing of government financing of companies, for example, to a broader pullback that would essentially strip the EU back to being merely a single market”, according to one report.
The updated possibilities would entail member states or groups of countries adopting different levels of participation with the union.
The European Commission was approaching a March meeting of the 27 members in Rome and Mr Juncker’s paper addressed the options that “once invited scorn from convinced Europhiles” and seemed maybe even to have some backing “of lifelong federalists” like the President.
Despite receiving backing, the idea was later dropped.
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