EU Chief Apologises to Italy for Not Initially Helping to Fight COVID-19, But Baulks at ‘Coronabonds’

“Today Europe is mobilising alongside Italy. Unfortunately, this has not always been the case,” von der Leyen wrote in Italy’s La Repubblica newspaper.

“It must be recognised that in the early days of the crisis, in the face of the need for a common European response, too many have thought only of their own home problems.”

Von der Leyen’s letter opened with an apology but ended with a list of the ways the EU was already helping Italy deal with the economic consequences of its three-week lockdown.

Italy has extended its closure of businesses and ban on public gatherings until April 13 to help stem infections that have already claimed a world-leading 13,155 lives.

“In the past month, the European Commission has left no stone unturned to help Italy,” she wrote.

But the German politician predictably made no mention of a mutualised asset, or “coronabonds” to share some of the direct fiscal costs from the coronavirus pandemic.

Spain and France – two nations with rapidly climbing covid-19 tolls – have backed Italy’s plea for the new common debt instrument.

But Germany, Austria and the Netherlands oppose the idea.

Common debt instruments can theoretically dilute risk and lower the borrowing costs of indebted countries while slightly raising those of nations spending within their means.

Loan guarantees

Von der Leyen on Thursday said the EU “will allocate up to 100 billion euros ($110 billion) to the hardest hit countries, starting from Italy, to compensate for the reduction in the wages of those working on shorter hours”.

She said the newly agreed initiative provides “loans guaranteed by all member states – thus demonstrating European solidarity”.

Von der Leyen concluded by proposing that “every euro still available in the EU’s annual budget be spent on tackling the crisis”.