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Nine EU leaders urge joint borrowing in Europe

AFP  |  Brussels 

Nine EU countries, including France and Spain, on Wednesday called for eurozone countries to jointly issue debt in order to fight the devastating impact of the coronavirus outbreak.

The idea of mutualised debt is a frequent request of heavily indebted EU nations and is championed by the European Central Bank, but it is seen as political poison in Germany and other rich northern members.

"In particular, we need to work on a common debt instrument... to raise funds on the market on the same basis and to the benefits of all member states," said the letter, which was also signed by the leaders of Italy, Greece, Ireland, Belgium, Luxembourg, Slovenia and Portugal.

France, Spain and Italy have long called for a some kind of eurobond, that is in effect joint borrowing by the 19 members of the euro single currency.

They say it could serve as the bedrock of a safer and more unified European economy and would become a globally respected asset on par with the US Treasury bills that help make the dollar the world's reference currency.

The leaders' request came after France backed Italy's demand for something called a "corona bond", an idea that Germany and the Netherlands have said is not necessary and have rejected.

German Economy Minister Peter Altmaier on Tuesday angrily lashed out at such ideas as "ideological" and inappropriate for the problem at hand.

Italy and Spain are the worst-hit countries by the virus outbreak and are both already burdened by a heavy load of public debt.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, March 25 2020. 18:52 IST