EU joint debt plan must remain a 'one-off' instrument, says Angela Merkel

The European Union’s plan to take on joint debt on a large scale and channel the money to member states worst hit by Covid-19 will create an important tool to overcome the crisis, but it must remain a one-off event, German Chancellor Angela Merkel said on Thursday.
 
She spoke to the Bundestag lower house of Parliament before it voted to approve the legislation for the EU plan. The upper house, or Bundesrat, is expected to pass it on Friday.
 
“In the debate today, it will be made clear again that the recovery fund is a one-off instrument limited in time and purpose,” Merkel said, adding that it was an “indispensable” tool to help overcome the Covid-19 economic crisis.

 

The legislation later passed by a large majority in the Budestag, garnering support not only from Merkel's conservative bloc and the centre-left Social Democrats junior coalition partner, but also from the opposition Greens and business-friendly Free Democrats.
 
The question of whether the EU should take on joint debt for other tasks in the future is likely to be a key topic in campaigning for Germany's federal election in September. Finance Minister Olaf Scholz, the SPD candidate to become the next chancellor, has said that strengthening relations within Europe would be one of his top priorities. He has hinted that he does not view the EU recovery plan as a one-off event. Scholz was a leading architect of a Franco-German blueprint to enable the European Commission to take on joint debt to help member states worst hit by Covid-19.