EU Economic Commissioner Gentiloni is calling for a new investment instrument to be financed through shared debt. Federal Finance Minister Lindner doesn’t think much of it.
Federal Finance Minister Christian Lindner has clearly rejected a push for new debt-financed EU projects.
“What we don’t need is new European common debt to finance subsidies that politicians then want to use to guide economic development,” said the FDP politician in Luxembourg on the sidelines of a meeting with his counterparts from the euro countries. Rather, what is necessary is a return to the core idea of the EU – an internal market with freedoms and “confidence that people can create prosperity every day with their inventiveness, their willingness to take risks, and their flexibility.”
Model Corona development program
EU Economic Commissioner Paolo Gentiloni had spoken out in favor of further joint borrowing. For example, he advocated an instrument for investments, for example in energy or defense, that should be financed through shared debt. The international community’s Corona development program could serve as a model.
The development program called “Next Generation EU”, which runs until 2026 and is worth more than 800 billion euros, is intended to help EU states cope with the economic damage caused by the pandemic. It will be financed through debts that are to be repaid together by 2058.
Lindner said Gentiloni’s ideas already point to the election campaign, in which there will be a clear distinction. There is a difference between more debt and a state-centered economy or a market economy path. The European elections will take place at the beginning of June. EU Commission President Ursula von der Leyen said of Gentiloni’s proposal that there were many different proposals that were being discussed by the states. However, the topic is not at the top of the agenda at the moment.
Source: Stern
