In recent weeks, the EU has been accused of being slow and ineffective during the most serious crisis in generations. Member states have not only engaged in a row to secure medical supplies, but have also made little progress regarding the EU’s contribution to the economic and financial costs of the pandemic crisis. The main dispute concerns whether the EU should issue mutualised “coronabonds” to finance healthcare spending and other crisis-related expenditure in the hardest-hit countries.
Coronabonds are joint debt issued to member states of the EU.
The funds would be common and would come from the European Investment Bank.
This would be mutualised debt, taken collectively by all EU member states.
Italy has consistently argued for more help from its European partners, as the current crisis was impossible to predict.
Germany and the Netherlands, on the other hand, are opposed to the idea as they see it as potentially putting their taxpayers on the hook for the debt of other countries.
Many are now wondering whether this row will sink the eurozone – but according to Jonathan Portes, Professor of Economics and Public Policy at King’s College London, if the monetary union is going to collapse, the reasons will be political.
He said: “I don’t think that not just issuing coronabonds will sink the euro area.
“The eurozone collapse will be primarily for political reasons.
“For instance, because of a public reaction in a country like Italy against the euro or the EU.
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“If they elect a nationalist, populist government, which engages in some form of confrontation, that could lead to the collapse of the eurozone.
“I don’t think it is the most likely scenario, but it could happen.”
Mr Portes added: “It could also happen by accident.
“I think Salvini is too clever to actually leave the eurozone, but he could bluff and it could all go wrong for everyone.
“It is a scenario that the eurozone should be very worried about and the reason why they should actually help out the Italian government.”
In another recent interview with Express.co.uk, Italian MEP Antonio Maria Rinaldi echoed Mr Portes’ claims and argued that if Italy were to actually leave, the euro would “immediately collapse”.
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He said: “No question.
“It would happen immediately afterwards.
“People should remember that Italy is second only to Germany when it comes to manufacturing.
“And the EU should start listening to us and responding adequately to this crisis.
“Right now, there is no leadership in Brussels.”
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