Spain and EU Commissioners call for common European debt instruments: newspaper By Reuters

FRANKFURT (Reuters) – Europe needs debt mutualisation and a common Marshall plan to recover from the coronavirus pandemic, Spanish Prime Minister Pedro Sanchez told German newspaper Frankfurter Allgemeine Zeitung.

EU leaders have tasked policymakers with finding a new way to finance a recovery from the COVID-19 outbreak, after Germany and the Netherlands ruled out calls from France, Italy, Spain to create a common debt instrument.

Germany, among other nations, has long been opposed to issuing common debt with other European nations, arguing that it would stop individual countries from pursuing structural reforms and balancing their budgets.

Sanchez echoed the remarks of European Commission President Ursula von der Leyen who on Thursday called for a new EU budget in the form of a “Marshall Plan” to help drive Europe’s recovery from the coronavirus crisis.

The Marshall Plan was an aid programme initiated by the United States in 1948 to help countries in Western Europe recover after World War Two.

In the medium term, Europe needs a “new mechanism for debt mutualisation”, Sanchez also told the newspaper. “If the virus doesn’t stop at borders, then financing mechanisms cannot do so either,” he said.

Separately, the European Union’s Internal Market Commissioner Thierry Breton, and European Economics Commissioner Paolo Gentiloni, told Frankfurter Allgemeine Zeitung that Europe needed to create a European taxpayer fund which could then issue long-term bonds to pay for a recovery from the pandemic.