Opinion | Europe Needs to Come Together. But Not Like This. - The New York Times

It’s neither necessary nor prudent to distribute debt across the continent.

By Jochen Bittner

Contributing Opinion Writer

• April 22, 2020

HAMBURG, Germany — Spider-Man, that force for good, taught us that with great power comes great responsibility. That’s especially true in times of strife. So in the midst of arguably Europe’s worst crisis since 1945, is Germany — the continent’s powerhouse — living up to its great responsibility?

This week may tell us. On Thursday, the heads of the European Union’s governments are meeting to discuss the introduction of so-called corona bonds, which would distribute countries’ debt across the continent. Several southern European states insist such bonds are essential to help fund the reconstruction of their economies, after the ravages of the coronavirus. But Germany, the Netherlands and other northern countries are strictly against the policy. It is bound to be a historic showdown.

The introduction of corona bonds might be a strong symbol of cohesion — but the joy will be short lived. They will in time cause damage from which Europe might not be able to recover. In the interests of the long-term well-being of Europe, it’s Germany’s great responsibility to resist them.

It’s entirely understandable that Prime Minister Giuseppe Conte of Italy has called for a rescue package of at least 1.5 trillion euros, around $1.63 trillion — and that he sees no other ways of creating the cash flow than by issuing collective bonds. But Mr. Conte should consider two things. First, this is not the euro crisis, with its starkly uneven effects: The coronavirus has hit the economies of Germany and other European countries in much the same way as it has Italy’s. Second, Germany and others are absolutely willing to help. But this readiness does not stretch to scrapping a fundamental principle of the eurozone — that the union shall not be liable for the commitments of single governments.

To cross this red line would do more harm than good. Corona bonds would breach a founding principle of the eurozone, a core promise that helped convince the Germans of the idea of the euro in the first place: Every country is responsible for its own budget and no one will be allowed to live at the expense of others. Even if intended to be temporary, corona bonds would be viewed as an opening of the floodgates. They would not only reawaken anti-European populist parties like the Alternative for Germany, whose support has been falling. By showing how malleable the rules can be, they would also spread euroscepticism far into the political center.

Sure, not granting the bonds is feeding populists in the south — like Italy’s opposition leader Matteo Salvini. The rescue package of 500 billion euros, around $540 billion, agreed to by E.U. governments this month, inflamed him: He is furious that Italy should have to “beg” for money. What’s more, this rescue money could come from the European Stability Mechanism, an emergency cash box created during the euro crisis, its funds carrying harsh conditions. For many Italians, accepting assistance from it feels humiliating; hence the call for corona bonds instead. Yet the Italian populists merely wield a sentiment, while the Germans have an argument. Corona bonds are simply not necessary to master the crisis.

First, rescue funds would come without tough conditions for Rome this time around. The German finance minister made it clear that it would be “inappropriate” in the current situation to make aid dependent “on fundamental debates about the pension system, the tax system, and the labor market.” So it’s baseless to reject the European Stability Mechanism as a mean, disciplinary tool.

In addition, the European Central Bank has already decided to buy extra state bonds this year to the tune of 750 billion euros, nearly $814 billion. This act of solidarity enables Italy and other southern European states to keep their sovereign bonds low, meaning they can borrow much more cheaply than they would otherwise be able to. In other words, Europe is printing money to help Italy. A third fund, possibly worth around 1.5 trillion euros, has been suggested by the European Commission and will be up for debate on Thursday, too.

The truth is that the challenge for the European Union is far bigger than the usual quarrel between north and south. Europe needs to generate money for continentwide reconstruction — for a new Marshall Plan. But the coronavirus has been weakening Europe’s economic immune system, leaving it unable to defend itself. The European Commission has warned, for example, that China could go on a shopping spree, buying out hundreds of cash-strapped European companies.

So the real question for Europe should be how to strengthen its defenses. Possible steps would be to make the continent a more friendly place for start-ups, cutting red tape wherever possible, especially in sectors like climate-friendly technology. It’s time for vision. How about Europe strives to bring the first hydrogen-powered airplanes to the world market, for a start? While the ruinous effects of the coronavirus have given rise to extraordinary solidarity, it is of a compressed, jealous kind. That attitude needs to change, north and south.

And yes, there is need for strong symbolic action, too. Here’s an idea that would help immediately: Germany currently has 10,000 free intensive-care beds, while Italians and other Europeans are dying because their health care systems are overstretched. More critically ill patients should be airlifted to the country to receive treatment — not just a few dozen, but a few hundred. That should be a moral imperative.

Europe’s past has been difficult, often antagonistic. But the union is strongest when it builds a common future where countries can thrive together. Spider-Man, after all, was a networker.

Jochen Bittner (@JochenBittner) is a co-head of the debate section for the weekly newspaper Die Zeit and a contributing Opinion writer.

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