Italy: Prime Minister Giuseppe Conte continues to insist on euro bonds

Giuseppe Conte

Italy’s prime minister continues to call for corona bonds.

(Photo: dpa)

Rome For weeks Giuseppe Conte has been fighting for common European debts to combat the economic consequences of the corona crisis. These euro bonds that Italy absolutely wants are now also known as “corona bonds”.

Spain is also in favor, France has made a generally positive statement, but Germany, the Netherlands and other EU countries reject the common European borrowing given the high level of debt in Italy.

He will continue to demand the introduction of such a “common, ambitious and fair financial instrument”, said Conte in an interview with the “Süddeutsche Zeitung”. This is the only way to send a powerful signal to the world: “Europe is solid and one.”

He had announced the same to the Italians a week ago when he announced that the curfew and industry stop would continue until at least May 3. There, too, he literally called for “all the EU’s firepower” and said that Italy would continue to fight for the introduction of euro bonds. These would have to be used quickly.

Now he put more fuel. It is not about “communitating past or future debts, but only that we all make this extraordinary effort together,” said Conte to the Germans. This solidarity is specifically designed and limited in time. “It will strengthen us enormously in the markets,” said the prime minister.

Domte pressure puts pressure on Conte

Conte used strong words. The view of the federal government or the Dutch government, for example, must now change, he said. Many countries only looked at their own advantage. For example, Germany’s trade surplus is “higher than the EU rules”. With this surplus, Germany does not serve as a locomotive, but as a “brake on Europe”.

These are not new arguments from Rome. Conte talks like this because he is under immense domestic political pressure. Opposition leader Matteo Salvini immediately called for the resignation of Economics and Finance Minister Roberto Gualtieri and threatened a motion of no confidence in the government against the government when Italy’s demand for the introduction of euro bonds at the EU finance ministers meeting before Easter had not been met. The anti-European tones of the Lega, headed by Salvini, but also from the ranks of the ruling party movement Five Stars, have been piling up recently.

After long negotiations, the EU finance ministers negotiated a rescue package for companies and employees of up to 540 billion euros. Conte had told the Italians that these “proposals” from the Eurogroup were a first step that Italy considered inadequate.

The package also includes precautionary credit lines from the European Stability Mechanism (ESM) of up to EUR 240 billion for all states in the Eurogroup, with the stipulation that the funds are used for health costs, and the establishment of a reconstruction fund. Italy would benefit from this with 36 billion euros.

But there is a strict “no” in the government of the five stars and in the opposition. “Italy does not need the ESM, it is not a suitable instrument,” said Conte. The ESM has a bad reputation. Again he added: “We have not forgotten that the Greeks were asked to accept unacceptable victims in the last financial crisis so that they could get loans.”

Aid packages against recession?

The second ruling party, PD, sees it differently. “We need the money, we should take it,” said Secretary General Nicola Zingaretti. Former Prime Minister Romano Prodi became clearer. “It is incredible that the five stars are against the ESM. Italy should try to extend the duration of the loan, ”he said.

The political dispute and Italy’s attempts to convince euro bonds will continue until the EU summit. However, it is already clear that all the aid packages launched by Italy will not be enough to offset the recession that the country has experienced as a result of the corona crisis.

Civil protection reported Sunday that 178,972 people had been infected, 47,055 had been cured and the death toll was 23,660. After all, the number of new virus deaths has dropped to 433, the lowest level in a week.

More: The EU finance ministers endanger the euro if they continue to argue about the European Corona aid package. No country can only benefit from monetary union.


Dax closes more than one percent in the plus

Dax curve

View of the Dax curve in the Frankfurt trading hall.

(Photo: dpa)

Dusseldorf The leading German index rose by almost 1.3 percent from trading and closed the day at 10,696 counts. So that is the Dax currently not to brake

However, there was no trading on the Xetra platform for more than four hours. The reason for the interruption was a technical problem with the electronic trading system T7, said a spokesman for the German stock exchange. “An error in the internal communication of the trading system triggered the problem.”

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Dax is heading towards 11,000 points

Dusseldorf The leading German index is currently unstoppable. In the first hour of trading the Dax 1.3 percent increase and is traded at 10,703 points.

The German leading index has risen by more than 2,500 points since mid-March. You can marvel at this rally and believe in a renewed sell-off wave. But the fact is also: According to chart technology, the situation has eased significantly.

According to many technical analysts, the significant price gains in the past are more than just a bear market rally, an intermediate recovery in the intact downward trend, but a sustained upward trend.

“As a result, the DAX should continue to rise, with the area around 11,025 / 11,032 points representing massive resistance,” say the technical analysts at Düsseldorfer Bank HSBC in her morning comment today.

Investor sentiment remains with a critical assessment of the situation. Investors should continue to sell positions that they would not keep in a new sell-off wave, advises Stephan Heibel after evaluating the current Handelsblatt survey Dax-Sentiment. “I wouldn’t run after the courses because the courses now reflect a lot of hope,” he says. Reality should be gradually presented in the coming weeks through company figures.

Positive trading data from China spur the market on Tuesday. Exports shrank in March, but not nearly as much as feared. The People’s Republic had recently relaxed the massive restrictions on public life.

Should China now come with a comparatively small economic loss from the pandemic, that would be positive for the global economy, said Thomas Altmann, portfolio manager at QC Partners.

Hopes of the peak of the coronavirus epidemic hitting Asian equity markets skyrocketed on Tuesday. The Nikkei even rose 2.8 percent.
But the crucial data for future stock market developments come from the United States.

At midday in Central Europe, the US banks JP Morgan and Well Fargo as well as the pharmaceutical and consumer goods manufacturers Johnson & Johnson new business figures. The banks’ prospects in particular are likely to influence the Dax curve.

Because not only the disastrous economic development in the US, but also the key rate cut by the US Federal Reserve is a burden for US banks.

The US standard values ​​started yesterday’s Easter Monday with losses in the new week. But the US futures contracts signal a trade opening at 3:30 p.m. Central European 1.7 percent higher.

Above all, the bank stocks there are benefiting from the economic easing in neighboring Austria. The Bawag– and the Raiffeisen papers increase by more than six percent at the opening of the trade, leading the European banking index. Erste Group’s stocks rose by more than three percent, as did the Austrian selection index ATX.

Look at other asset classes

The euro is rising. In the morning, the common currency was trading at $ 1.0944 after just a little above $ 1.09 last night.
This rise has more to do with the friendly mood on the stock markets than with the Eurogroup’s agreement last Thursday on the corona crisis.

It was a compromise that didn’t make either side happy. The supporters of corona bonds did not because they were not decided. And not the opponents, because they were not excluded in bulk.

“This is how Europe squandered every chance to establish the euro as a” safe haven currency “”, the currency analysts of the Commerzbank.

Oil prices hardly react the decision to cut oil production in the 20 largest industrialized countries.

A barrel (159 liters) of the North Sea type Brent costs $ 32.20, up 1.4 percent. The price of a barrel of American WTI for May rose 0.8 percent to $ 22.60.

Because the weak demand continues. Accordingly, market observers do not expect a sustained recovery in oil prices. According to estimates, the slump in demand as a result of corona virus containment restrictions could reach up to 35 million barrels a day.

Look at the individual values

Eon: The share is one of the few losers in the Dax with a minus of almost two percent. According to traders, they were created by the experts at the US investment bank Goldman Sachs downgraded to “Sell” from “Neutral”.

Wirecard: The paper from the online payment service provider tops the Dax list of winners with a plus of four percent. The share certificate has come comparatively well through the stock market crash. The price has risen by around 25 percent in the past four weeks, since the beginning of the year the minus has been only 0.65 percent.

“When planning wealth, the rule is: never get out completely!”

Here is the page with the DAX course, here is the current tops & flops in the Dax. Current Short sales of investors can be found in our Short sales database.


Coronavirus – The situation on Saturday: More than 120,000 corona infected people in Germany – Federal President delivers speech

Worldwide, more than 100,000 people have died of Covid-19. Many countries are extending their exit restrictions. Family businesses are facing the end. .

Italian government extends lockdown until May 3

Rome The curfew in Italy has been in effect since March 10. Now the lockdown is being extended by another three weeks. “The restrictions will remain until May 3rd, which is a difficult but necessary decision for which I assume political responsibility,” Prime Minister Giuseppe Conte said on Friday evening at a press conference that had been postponed by the hour. This shows how difficult it is for the government to communicate. More and more Italians complain about the strict conditions. The first decree on the curfew of March 10th would have expired on Easter Monday.

Conte said the extension was necessary to stop the corona disease from spreading further. There are encouraging signals that this will succeed, but one must remain vigilant.

According to data from civil defense on Friday, there are a total of 147,577 corona sufferers in Italy, 30,455 of whom have been cured and 18,849 died. Italy is still the most affected country in Europe. There were 4,204 new cases on Thursday alone.

“First the health, then the economy,” regional minister Francesco Boccia had previously announced the government’s line. That is why the production stop, which has been in effect since March 23, will be maintained. Conte said that after May 3rd, it would “gradually” reopen.

First business openings after Easter

After Easter, stationery stores, bookstores, laundries and baby clothing stores are likely to open, but only industrial sawmills and forestry companies. For the so-called “phase 2”, a team of experts will decide how and when the economy can produce again, says Conte.

The number of sick people in Italy has been stabilizing for a few days. “The curve clearly shows a flattening and that’s a positive sign, but we shouldn’t be less careful about it,” said Silvio Brusaferro, President of the National Health Institute ISS – a research institute that advises the Ministry of Health on public health control issues. The measures taken so far have been efficient.

But the Italians’ resentment grows after more than 30 days of curfew. In bright summer weather, more and more people can be seen on the street. Interior Minister Luciana Lamorgese announced on Friday that police checks on the streets would be increased on Easter Day.

People in Italy are only allowed to leave their homes to go to the doctor, pharmacy or supermarket. Anyone who goes out must also carry a self-declaration with them. Around six million people have been checked since the curfew began, Lamorgese said.

Dispute over aid package of the Eurogroup

The part contest in the press conference on the decision of the Eurogroup on Thursday night was more difficult. The news of the agreement of the Euro finance ministers on a 500 billion aid program was only small on the front pages of the Italian newspapers on Friday and had led to a violent domestic dispute.

Lega chief Matteo Salvini in particular called for the resignation of Economics and Finance Minister Roberto Gualtieri and threatened a motion of no confidence in the government against the government because Italy’s demand for the introduction of euro bonds had not been met. “Our patience is running out, we will stop it, I promise,” he wrote Facebook.

In addition, there is a strict “no” to the European Stability Mechanism (ESM) not only in the opposition, but also within the government coalition. Among other things, the finance ministers had agreed that the ESM would provide credit lines as a precaution for all countries in the Eurogroup – with the stipulation that the funds would be used for health costs.

Conte said the “proposals” from the Eurogroup were a first step that Italy considered inadequate. Italy will continue to fight for the introduction of euro bonds, which should be used quickly.

Commentators in Italy see it differently: “The fight for Eurobonds had been lost for days, but they wanted to make it a symbol of a challenge to the rest of the EU that ended in nothing,” says La Repubblica.

A visibly angry Conte appealed to the opposition’s responsibility. “Lies hurt,” he said, calling Salvini by name. The domestic political dispute in Italy has further intensified.

More: You can read all the latest developments in our live corona virus blog.


Merkel warns of patience in the corona crisis – and expresses cautious hope

Angela Merkel in Berlin

Despite cautious hope, the Chancellor warns of taking too much of the easing.

(Photo: AFP)

Berlin According to Chancellor Angela Merkel (CDU), the corona virus will continue to determine life in Germany for a long time. There is reason to be confident, said Merkel on Thursday in Berlin with regard to the spread of the virus. At the same time, she emphasized: “We must not weigh ourselves in safety.”

The Chancellor warned against taking a big step in easing the very tough regulations, “which will then throw us back completely”. The worst would be if the current tough or even tougher security measures had to be taken. “And that’s why it will take patience.”

The Chancellor also pledged to support the planned European bailout package of around EUR 500 billion for vulnerable states, companies and jobs in the crisis. She hoped that this would be decided in the Eurogroup, said the politician.

However, Merkel still rejects common European debts via corona bonds. She said there were so many other ways to show the much needed solidarity in Europe. Germany is ready and obliged to do so.

It relies on the instruments that are being discussed in the Eurogroup: precautionary credit lines from the ESM euro rescue fund for troubled countries, extended programs of the European Investment Bank (EIB) for companies and the “Sure” short-time worker program proposed by the EU Commission.

More: NRW Prime Minister Laschet campaigns for “flexible entry” with effective corona rules.


EU finance ministers agree on bailout package against corona crisis

“Today is a big day of European solidarity and strength,” said Federal Finance Minister Olaf Scholz after the lengthy negotiations in Berlin. “It is about the health of citizens, it is about job security and it is about many companies remaining in this crisis.”

French finance minister Bruno Le Maire spoke on Twitter of an excellent compromise. The 500 billion euros would be immediately available. A new fund to revive the economy will also come. Europe has decided and shows that it is up to the crisis.

Three elements are included: precautionary credit lines of up to EUR 240 billion from the ESM ESR which could particularly benefit countries affected by the pandemic; a guarantee fund for corporate loans from the European Investment Bank (EIB) to mobilize € 200 billion; and the “Sure” short-time worker program proposed by the EU Commission worth EUR 100 billion.

The conditions for access to the ESM credit lines were controversial until the very end. The Netherlands originally wanted strict guidelines, but Italy and other countries refused. As a compromise, it has now been agreed that the only condition for access to the lines of credit is the obligation that the money be used, directly or indirectly, to fund health care, healing, and prevention against Covid-19.

The ESM was founded in 2012 at the height of the euro debt crisis. Secured by deposits from the euro states, it borrows on the capital market and passes it on to certain states under certain conditions, which would have to pay higher interest rates on the market or would no longer be able to obtain credit.

In addition, EU finance ministers agreed on a temporary recovery fund to support the economic recovery. This should express the solidarity of the EU with the countries most affected by the pandemic and take into account the extraordinarily high costs of coping with the crisis. However, details should first be clarified, including the sources of funding.

Dispute over corona bonds postponed

Some states want to issue community bonds for this, while others – including Germany – reject such corona bonds. The argument about it was ultimately postponed.

Chancellor Angela Merkel stood behind the rescue package with the three elements ESM, EIB and “Sure” on Thursday before the decisive round of negotiations, but Corona Bonds once again rejected the offer. There are so many other ways to show the now urgently needed solidarity in Europe, said the CDU politician. Germany is ready and obliged to do so.

The three points from the rescue package totaled many billions, said the Chancellor. In addition, there must be an economic stimulus program for the economy and jobs after the crisis. “Germany will also participate in this,” she said. Discussions about the EU budget are now under a completely different guise.

More: Billions against the corona crisis: the EU is considering these aid programs


The first European emergency aid for the economy is ready

EU flag

The EU could launch a recovery program for the economy after the corona crisis.

(Photo: dpa)

Brussels The EU announces implementation: After weeks of heavy disputes, the finance ministers of the 27 member states have agreed on a loan package to cushion the costs of the corona crisis. The ministers had negotiated all night on Tuesday and wrestled all evening again on Thursday. “We did it,” announced the visibly relieved chairman of the Eurogroup Mario Centeno Thursday shortly before midnight.

The loan package amounts to up to 540 billion euros and comprises three parts. The Euro Rescue Fund ESM provides a precautionary credit line for euro countries that are overwhelmed by the financial consequences of the pandemic.

In theory, every euro country can receive a loan of two percent of its gross domestic product from the ESM. In the unlikely event that all euro countries exercise this option, the ESM would have a loan volume of 240 billion.

The usual conditions for ESM loans are largely suspended in the corona crisis: recipient countries are not obliged to undertake economic reform. Italy, in particular, had insisted that an ESM loan would probably be applied for.

The Netherlands initially did not agree to the loosening of the ESM loan conditions and therefore blocked the Corona loan package on Wednesday morning. However, the Netherlands was completely isolated with its no in the EU and met with great misunderstanding among its European partners. The government in The Hague came under massive pressure and finally gave in.

Reconstruction program for the economy possible

In the end, the Netherlands still enforced that the use of ESM loans would be strictly limited to expenses caused by the corona crisis in the healthcare sector.

The EU Commission and the European Investment Bank (EIB) are also involved in the Corona loan package. The Commission is providing loans of up to € 100 billion to help Member States finance short-time work benefits. The EIB secures corporate loans up to a total volume of EUR 200 billion.

Eurogroup leader Centeno and EU Economic Commissioner Paolo Gentiloni made it clear that the first emergency aid from Corona will not be enough to deal with the financial consequences of the pandemic. After the crisis, there must be a European reconstruction program for the economy. The EU heads of government would have to decide on the scope and funding of this program, said Centeno.

Financing is particularly controversial in the EU. A group of states led by France wants to borrow European government bonds. A group led by Germany rejects euro bonds and instead wants to finance the fund from the EU budget.

The EU heads of government are expected to meet for their second video conference since the outbreak of the corona crisis in April and then discuss the reconstruction fund.

More: Billions against the corona crisis: the EU is considering these aid programs


EU plans billions for rescue and reconstruction after corona crisis

These are loans and loan guarantees with a total volume of up to 540 billion euros, provided by the ESM Euro Rescue Fund, the EU Commission and the European Investment Bank.

The decision comes just in time. The corona crisis has fueled smoldering conflicts between north and south, between financially healthy and highly indebted countries in the past few weeks, so that it threatens to tear the EU apart.

Chancellor Angela Merkel emphasized that Germany can only do well if Europe is doing well. French President Macron also explicitly supported the project.

A signal of commonality is urgently needed – also to prevent new speculation waves in the financial markets against weak euro countries and to strengthen the credibility of the European Central Bank.

The Eurogroup now wants to build a bridge, but that doesn’t mean that the deep trenches across the EU will be overcome. The dispute over euro bonds, which has shaken the European community for weeks, will continue. “An overwhelming majority of member states are in favor of establishing a reconstruction fund for the European economy and financing it with common government bonds,” an EU diplomat told Handelsblatt.

Supporters include Mario Centeno, Chairman of the Euro Group. The Portuguese finance minister has realized that euro bonds cannot be enforced in the short term. Germany, the Netherlands, Austria and Finland are fighting against it with all their might. The first EU aid package for the economy is therefore not funded with common government bonds, it said in Brussels.

But postponement is not canceled: France, Italy and the other supporters have postponed their call for euro bonds, but have not given up. Italy’s Prime Minister Giuseppe Conte demands “European reconstruction bonds” for the period after the crisis. French EU Industry Commissioner Thierry Breton calls for a “European fund for the recovery of industry” to be financed with long-term European bonds.

Centeno therefore does not want to leave it alone with the first EU emergency package for business on Tuesday. The Eurogroup must also agree to at least keep the option open for a post-crisis stimulus package financed by Eurobonds, Brussels said.

A reference to this must be included in the written declaration of the Eurogroup. Italy has made this a condition for its approval of the EU’s economic aid package this Tuesday.

The package consists of three elements

First: The ESM sets up a precautionary credit line for countries that are financially overwhelmed to cope with the crisis. In theory, every EU country can apply for up to two percent of its annual economic output from this so-called enhanced conditions credit line (ECCL). In the unlikely event that all 19 euro area countries do this, the total ECCL loan amount would amount to 240 billion euros.

The conditions normally associated with ESM loans are significantly weakened in the corona crisis. The only requirement now is that the credit is limited to corona-related expenses.

Beneficiary countries must also commit to respecting the European fiscal rules – which is currently irrelevant: the stability pact is suspended due to the crisis, the limits for total debt (60 percent of gross domestic product) and deficit (three percent of GDP) do not apply.

The eurozone does not want to prescribe an economic reform program, as actually provided for in the ESM rule book, to recipients of Corona aid loans. The usual troika for monitoring household renovation in the respective country should not exist either.

Secondly: The EU Commission offers loans to EU countries to help finance the exploding costs of short-time work benefits. To this end, the Commission plans to raise up to € 100 billion on the financial markets. The EU states are to guarantee a quarter of this sum.

Third: The European Investment Bank (EIB) wants to provide a guarantee for corporate loans – up to a total of 200 billion euros. The EU member states would have to provide a guarantee so that the EIB does not lose its top rating in the financial markets. There is still resistance in Berlin against the program proposed by EIB President Werner Hoyer. (Read Hoyer’s guest post here)

The Federal Ministry of Finance considers the sum of 200 billion euros to be excessive. Germany is demanding that the EIB loan package be “significantly” reduced. The reason given was that Germany had already launched a large loan program for companies at its own state development bank Kfw and was therefore not interested in an additional large EIB program.

The dispute over the volume of guarantees at the EU house bank is expected to be resolved at the Eurogroup meeting on Tuesday, it said in Brussels. In the end, it is not expected that the whole EU credit program for the economy will fail.

If the Eurogroup agrees on the tripartite program as expected, then it will be the turn of the EU heads of government. EU Council President Charles Michel is likely to convene a video conference of the bosses – it would be the second since the outbreak of the corona crisis.

Centeno will report on the decisions of the Eurogroup – and also on the wish of many EU finance ministers to launch a reconstruction program for the economy financed by Eurobonds. French President Emmanuel Macron, Italy’s Prime Minister Giuseppe Conte and Spanish Prime Minister Pedro Sanchez are also likely to take up the issue of euro bonds again.

France is increasing the pressure

In Paris, the position has hardened compared to last week. In addition to the three elements of ESM, aid from the EIB and the financing of short-time work, the fourth stage at the meeting of finance ministers on Tuesday must include a fund that finances government expenditure and contains a dose of debt communitarian funding. Otherwise, France cannot agree to the overall package, it is now said in Paris. Those responsible do not want to be quoted.

Regarding the details that will be discussed later, the French ideas are as follows: The fund should be of the order of three percent of the EU’s economic output (GDP), which would be almost 500 billion euros. It would finance government spending alone, such as the health system or investments in infrastructure or technology.

The funding that flows into each country would be based on objective criteria such as the number of corona victims, the unemployment rate or the shrinking GDP. Redemption, on the other hand, would be limited to the country’s share of EU GDP. This would include an element of redistribution – otherwise such a fund would also have no sense, since it is intended to help the countries most affected.

The fund should be set up as a special purpose vehicle (SPV) and be financed through bonds guaranteed by all countries. Part of direct payments or equipping the fund with a special tax is also conceivable.

All of this, it is emphasized in Paris, can be debated later. But the principle had to be decided now – also because otherwise the burden would remain with the European Central Bank for years to come, which would have to buy government bonds of the particularly badly affected countries by far above average.

Not a pleasant situation for Merkel

Not a pleasant situation for the Chancellor: Angela Merkel represents a minority position in the EU in the dispute over the euro bonds and is increasingly on the defensive. Indirect support comes from the EU Commission chief.

Ursula von der Leyen does not advocate euro bonds. Instead, it demands that member states increase the new EU financial framework for the years 2021 to 2027 more than previously planned. The additional funds would go to countries that are suffering badly from the consequences of the corona crisis.

For net contributors like Germany, however, this would also mean higher transfers from the federal budget to Brussels. The federal government left open whether it is ready for it. The multi-year EU budget must be decided by the second half of 2020 at the latest – and in July Germany will take over the rotating EU Presidency.

The economic consequences of the corona crisis will then be felt with full force. The question of solidarity in Europe remains on the political agenda – and with it the issue of euro bonds. And the pressure on Germany will continue to grow.
More: Billions against the corona crisis: the EU is considering these aid programs. Read more here.


Europe is facing its historical test!

The corona crisis means dramatic losses for Europe: we lose thousands of lives from an ever-deadly viral disease, we lose prosperity and jobs as a result.

Who should still believe in the much-cited “Union of Values” of Europe, if this Europe in the greatest crisis since its existence literally turns out to be worthless? How hollow the Sunday speeches about “European solidarity” may sound in the ears of the affected regions of Europe, if at the beginning of the infection crisis, when the first signs of mass death were already evident in Italy, European member states – including Germany – first banned the export of medical products Impose aid in Italy instead of providing emergency aid?

And what is left of the European idea if, in the everyday life of the crisis, only the individual nation states seem to be able to act through closed borders and national aid programs – or are left helpless when they are defeated by national means alone in the fight against the pandemic?

The European Union threatens to fail dramatically in this greatest test since its inception. Instead, we see that powers like Russia and China are providing effective public aid to emphasize precisely this deficit in Europe. It is obvious that humanitarian and political goals are being pursued at least at the same time.

Sigmar Gabriel

The author was environment, economy and foreign minister and vice chancellor.

(Photo: dpa)

Joschka Fischer

From 1998 to 2005 the author was German Foreign Minister and Vice Chancellor.

(Photo: dpa [M])

It is true: the export ban for aids has now been lifted again. Germany is one of the countries that offer seriously ill patients from Italy, France and Spain, for example, hospital beds and intensive care because our capacities are still sufficient. But this aid, which is as important as it is good, is little more than the famous “drop in the bucket” given the impact of the crisis, the thousands of deaths, mass unemployment and severe social upheaval.

Countries like Italy and Spain will not forget Europe and especially we Germans for 100 years if we let them down in the face of this threatening and already beginning development in their countries. And that’s exactly what we’re doing.

Europe threatens to become a zero-sum game in which nation states believe that if someone gets something, someone always has to lose. Donald Trump has made this the credo of his international politics. Now this “my-nation-first virus” has apparently also infected Europe.

The assertion that has repeatedly been made in Germany for decades that Germany is a “net contributor” has repeatedly proven this anti-European resentment anew. Of course, Germany pays more taxpayers’ money to Brussels than it receives back from subsidies – only that’s not even half of the bill.

One really only has to know the basic arithmetic to know that a country like Germany that exports (or: exports) far more goods and services to Europe than it imports (or: imports) from there obviously also has more money in the country gets than it spends in other countries. There is no other way to become an export European and world champion.

Germany is the biggest winner in Europe

The truth is: our country is the biggest economic and financial winner in Europe. We even made money from the financial crisis in Greece. Our neighboring and member states in the European Union know all of this. That is why you are now rightly looking at what Germany is doing to use part of the wealth it has acquired through Europe for this Europe.

Europe is not just a peace project, but also an economic, social and ecological project, not a “zero-sum game”, but the opposite: it literally creates “added value” for everyone. Especially for Germany and definitely also in the financial and economic sense. The founders of the European Union knew that and what Europe needs now is the courage of this generation of founders.

Because, of course, it is not popular everywhere to share the hard-earned economic performance in your own country with others. Especially not when you are in the middle of a crisis, the outcome of which neither politicians nor the population can safely judge today. The fearful question, “Don’t we need our medical and economic resources for ourselves?” Is not immoral or reprehensible.

The answer to this, however, is that no country – not even Germany – will come out of this crisis alone and on its own. Because our economic and social collapse of our neighbors will also reach apparently safe Germany. In Europe there is prosperity and security only for everyone or for nobody. That was the reason why the founding generation dared to take on this daring project of European unification, although it was certainly not popular to ask us Germans at the table of a united Europe shortly after the devastation of the Second World War.

No country has benefited from this solidarity as much as Germany – because with the establishment of European integration, the countries reached out to us as friends and partners, the streets of which the boots of the German occupiers had marched a few years earlier. The success story of the Federal Republic could not be told without Europe’s solidarity.

Nobody therefore has as much Europe within them and nobody has as much responsibility for Europe as our country. That is why it must now show willingness to lead in Europe – preferably together with France. Europe now needs two things: joint aid in the crisis and a joint reconstruction program after the crisis.

Just as there were two projects in 1948 that, due to their historical size, have remained in our country’s collective memory to this day: the Berlin Airlift to supply the needy citizens of West Berlin and the Marshall Plan for the Reconstruction of Europe, which is today after all, it would have a value of just under 150 billion euros and from which the German state bank KfW (formerly: Kreditanstalt für Wiederaufbau) comes. KfW still manages twelve billion euros as a special fund from what was then the “Marshall Plan”. Even today – 70 years later – KfW is financing the aid measures that have just been decided for German companies in the corona crisis from these assets.

Three-step program for Italy and Spain

The hardest hit by the corona pandemic, such as Italy and Spain, need an overlapping three-tier program: emergency medical and humanitarian aid; medium-term, long-term European loan support, which is not counted towards the Maastricht criteria, to stabilize the domestic real economy; long-term innovation promotion program to secure economic and social future.

Germany would be well advised to take part in such an aid program at European level instead of continuing the ideological dispute between Northern and Southern Europe over euro bonds or corona bonds. Because one thing is clear: Neither Italy nor Spain are able to raise the necessary funds to rebuild their countries as new government debt alone. Europe has to relieve them of the burden of interest and presumably also repayment.

The signal that all European member states are ready to do so must come quickly. Otherwise right-wing extremists in both countries will try again to warm up their nationalist soup against the EU. It is in both European and German interests that these governments in Italy and Spain, which are undoubtedly democratic, are economically, socially and thus politically stable and stay European-minded!

Of course, in the medium term and regardless of the current crisis, Europe will also have to jointly guarantee the single currency. Only then will the euro become a real international reserve currency and an alternative to the dollar. If we do not do this, Europe will not achieve its economic sovereignty, but in doubt will always depend on the policies of the dollar area, as we have had to experience bitterly in the dispute over the nuclear deal with Iran.

However, since this further development will not take place today and probably not tomorrow, there should be no debilitating principle conflict in the middle of the crisis. The clearest and clearest way would be to add an emergency aid fund to the budget of the European Union, which is fed by all member states and must have sufficient financial means to deal with major crises in Europe.

Incidentally, this also includes urgently finding answers to what Europe wants to do if the corona infection spreads in large numbers in the refugee camps in Greece or in Turkey or Syria. All international aid organizations warn of the human tragedy that will arise there and for which we are responsible, whether we like it or not.

The corona crisis needs a strong European response

Wherever the whole of Europe is threatened, the entire European Union must respond and must not delegate this response to sub-groups such as the Eurogroup. Or as George Marshall said in his famous Boston speech to justify the Marshall Plan: “(…) Europe’s economic realignment is a matter for the Europeans themselves. I think the initiative must come from Europe. The program should be a collaborative one, agreed by some if not all European nations. ”

The dispute in any case, whether the European Union should do this within the common currency group of the euro with common bonds (bonds), whether existing financing options such as the 410 billion euros of the European Stability Mechanism (ESM) can be used for this or a new instrument has to be created because the ESM was created for completely different goals and is therefore unsuitable for today’s situation, should be ended and decided quickly.

Handelsblatt Morning Briefing - Corona Spezial

The corona crisis needs a strong and audibly European response of cross-border and practical solidarity: It means a challenge that ignores national borders and in some cases drastically overwhelms the ability of individual states to act. If we want to survive the major strategic challenges of the new decade – from digitization to migration and security policy – we Europeans can only do it together.

Crises can be opportunities for Europe – like the Balkan wars of the 1990s that led to the start of a European foreign policy. The corona virus has the potential to accelerate two opposite processes: Either it deepens the cracks already existing in Europe so that the Union could break apart. Or the European Union and its member states succeed in agreeing its consequences in the fight against the virus. It is very important to us Germans which way Europe will take. We don’t have much time left for that!

More: The pandemic is a stress test: can Corona destroy the EU?