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Spain pushes for joint European debt issuance to fight coronavirus impact

imageCoronavirus4 hours ago (Apr 01, 2020 04:35AM ET)

(C) Reuters. European Union finance ministers meet for monthly talks in Brussels

MADRID (Reuters) – There must be a way to issue common debt shared by European Union countries, be it coronabonds or some other mechanism, Spain’s economy minister said on Wednesday.

Spain, together with France, Italy and six other countries, called last week for work on a common EU debt instrument to cushion the effects of the coronavirus pandemic, which looks set to trigger a global recession. Germany and the Netherlands opposed such a mechanism.

“Europe must respond united to the crisis,” Nadia Calvino said in an interview with radio station Onda Cero. “I don’t give up. We still think that, eventually, there must be a system of debt sharing, be they eurobonds, coronabonds or reconstruction bonds.”

EU leaders gave the bloc’s finance ministers until April 9 to come up with ideas on how to further support the economy. The EU has already relaxed state aid rules and debt limits to let countries spend to prop up their economies.

“The exiting of the crisis cannot be that each country takes extra debt or the extra spending it had because we are all fighting for the health of all Europeans,” Calvino said.

She said the Spanish government has no liquidity or financing problem so far. In recent days, the Spanish government financed itself on the markets with no difficulty, she added.

The coronavirus outbreak and the measures taken by the government to contain it will surely bring the country into recession, Calvino said, but she added the consequences will be “temporary” and she expects a rebound in 2021.

Spain pushes for joint European debt issuance to fight coronavirus impact

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