Some Leaders In EU Underestimating Covid-19 Induced Economic Crisis, Says Angela Merkel

There are people who are still not appreciative enough of what it will mean to slump into the “deepest recession since the second world war”, said German Chancellor Angela Merkel as she voiced fears over European Union leaders expressing opposing views of a recovery fund designed for those EU member countries that have been hit very hard by the novel coronavirus pandemic.

French president, Emmanuel Macron’s call for agreement before the summer holidays on a €750bn rescue package was supported by the German chancellor during a video conference call among the 27 heads of state and government.

According to reports quoting diplomatic sources, while addressing her counterparts phoning in from around the EU, Merkel was of the view that Europe faced “very, very difficult times” and wondered whether the other leader were able to understand the gravity of the current economic crisis.

It is expected that the economies of some member states of the EU will shrink by as much as 10 per cent in the current year.

“It was clear that we wouldn’t reach a result today but we will continue discussions in mid-July,” Merkel later told reporters. “Everyone said what they thought was positive and of course brought in points of criticism too. The bridges that we still have to build are big.”

Impressing of the need to calm down the markets prior to the difficult phase of negotiations about the future of trade and security relationship with the United Kingdom, Macron had also urged the other EU leaders to come to an agreement in the relief fund by next month. Ireland, Belgium and the Netherlands is demanding that the current recovery fund related to the novel coronavirus pandemic crisis should also offer them support if the Brexit negotiations did not end up in a deal.

“No one can say with certainty where these negotiations [with the UK] will be at the end of this year”, conceded the European commission president, Ursula von der Leyen.

There were very divergent views expressed by EU leaders about the overall scale of the recovery fund, the balance of loans and grants and the criteria that would be used for allocation of money to the member states is at the first real talks about the pandemic rescue fund.

There was opposition to the idea of condition-free grants from a section of EU leaders which included those representing the “frugal four” of the Netherlands, Austria, Sweden and Denmark.

“If we as an EU are going to borrow money, we don’t want to say ‘yes’ first and only then work out what we spend it on, how we spend it and who gets what. Are you borrowing money to borrow or to invest? Then you first need to know what you are going to spend it on and how profitable it is. But the whole political discourse of some countries is exactly the other way around: give us money first and then everything will be fine,” one diplomat from one of the sceptical countries reported told The Guardian.

(Adapted from TheGuardian.com)



Categories: Creativity, Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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