Angela Merkel was asked to consider the colossal debts racked up by Adolf Hitler’s evil war efforts some 81 years ago today. Rome has become infuriated with the German Chancellor after she helped block the creation of so-called “coronabonds”, a shared Eurozone debt mechanism to help prop up economies worst-affected by the global pandemic. In an open letter to the veteran leader, 12 Italian politicians, including the mayors of Venice and Bergamo, called on Mrs Merkel to reconsider her position.
“Currently the Netherlands are leading a group of countries, though, which resist this strategy, and Germany also seems to want to follow this group,” they wrote.
“The Netherlands are the one state, which has been evading taxes of the important European countries with its tax system for years. Our public budgets and the socially weak in our countries who have to pay the price for this. Those who are most affected by the crisis.
“The Dutch attitude is in every aspect an example of a lack of ethics and solidarity. But it was solidarity which was shown to you Germans after the war and until reunification by many European countries.”
The group were keen to remind Mrs Merkel that Hitler’s war machine run up debts of over €15 billion, in the Germany’s original deutsche mark currency.
They accused her of ignoring the generosity of Italy, Spain, France, Belgium, who have all voiced support for the creation of coronabonds, in halving the German debt in 1953.
“After 1945 the German debt had reached the amount of what was 29.7 billion deutsche mark,” the group wrote.
“Germany would never have been able to pay back the accumulated debt. In 1953 in London, 21 countries allowed for cutting the debt in half and the deferment of payments of the rest of the debt.
“This way German was able to avoid state bankruptcy. Italy is still proud and convinced of the correctness of the decision back then. And we repeat: with the eurobonds for the fight against coronavirus old debts are neither cancelled, nor shared.”
Despite the growing support for a joint Eurozone debt instrument, the single currency bloc’s bailout chief has warned it could take years to set up.
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Klaus Reglung, the managing director of the European Stability Mechanism, said any short-term lending programmes would have to come from existing structures.
He said if the goal is to cover short-term lending to bolster healthcare or support businesses “then I think the only way is to use existing institutions with existing instruments”.
He told the Financial Times it was possible to create a new bespoke EU institution if there were political agreement between European capitals.
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However, he added: “It would take one, two or three years, and member states have to come up with capital or guarantees, or assign future revenue.
“One cannot create bonds out of nothing.”
Eurogroup finance ministers are currently debating the plans, which are expected to be returned to leaders in the coming weeks.
Last week EU heads of state refused to sanction coronabonds and instead told officials to work on new plans to prop up the bloc’s ailing economy.
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