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We Need European Financial Solidarity to Fight COVID-19

During the first weeks of the COVID-19 outbreak in Europe, the absence of solidarity between European countries, with some of them even blocking shipments of medical devices, led to terrible consequences.

After that rocky start, solidarity has been developing. We have seen countries taking care of each other’s citizens when they have spare intensive care capacity, the supply of personal protective equipment and essential goods are flowing again across EU internal borders. Candidate countries haven’t been forgotten, either, with funding going to help the Balkan response in health systems funded by the EU.

However, as a union and as a community, we can do more, and we must do more.

The economic crisis that will follow COVID-19 is expected to be significantly worse than that of 2008-2009, possibly even on the scale of the Great Depression if not tackled properly. This shows us that this is a crisis like no other. Public action will be needed to help the economy recover, and to make sure that the most vulnerable are not the victims of that crisis again. The countries that were hit the strongest by the COVID-19 outbreak, such as Italy and Spain, might suffer the most from its economic consequences. These are the very same countries that have already suffered the most from outcomes of the 2008-2009 crisis and who face difficulties in funding the measures that are needed to combat and rebuild due to the corona crisis. We cannot leave them alone in this! European solidarity is needed to prevent this from happening.

FYEG follows the measures proposed by the European Commission. European unemployment reinsurance (SURE) and the financing of short-term work could help millions of Europeans pay the bills and keep the lights on even while the economy goes into a hiatus. The €15 billion pledged to aid the response in countries around the world with weaker health systems could make a difference. But, this won’t be enough.

Southern European states need more help and support in getting through this crisis through direct financial instruments. This cannot take the form of another European Stability Mechanism (ESM) loan or any other measure that requires austerity or other onerous conditions. There are other, much better measures, that can be put in place and that we as a union of states, peoples, and citizens alike, can take for a real pan-European solidarity.

We support Eurobonds or any other instrument or package that achieves the same level of solidarity. By issuing government bonds jointly as a Europe, tied to the bedrock of the Northern European economies, Italy, Spain and Greece would be able to enjoy the same negative bond yields as Germany. Other options that are currently on the table include the European Investment Bank issuing debt and interest-free loans to Southern states, or setting up a coronavirus foundation, but these can only be viable measures if they don’t include onerous conditions and are for real amounts, not token sums.

In addition, we believe that the EU itself should be allowed to borrow money to support the economic recovery and that funds are used to move towards social and sustainable solutions, for example by enacting a kerosene tax or a financial transaction tax to reimburse this debt.

Several governments such as the German, the Austrian, the Dutch or the Finnish government, are refusing to give this financial assistance in a time where Europe needs solidarity to survive. We call upon the Eurozone Finance Ministers to take actions that improve European solidarity, aid the most vulnerable, and that fight the coronavirus.

We call for action, because the alternative - not doing anything - is an unthinkable future. When this crisis is over, will the citizens of the most affected countries remember how the rest of Europe helped them, or how they were left to fend for themselves by political leaders? If it is the latter, then European disintegration may be inevitable. Political leaders, the choice and course of how this plays out historically is yours.

European solidarity today means European stability tomorrow, for our future and that of generations to come. We will not let the youth of today and the youth of tomorrow suffer from the consequences of inaction, in times that strong political leadership and action is needed. This is the time for us to show true European solidarity.