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The International Monetary Fund is forecasting the euro area will experience a drop in real GDP of more than 7 percent this year and only partly recover in 2021. Meanwhile, the EU has been largely missing in action during the continent’s most serious crisis in generations. Member states have not only engaged in a row to secure scarce medical supplies, but have also made little progress regarding the EU’s contribution to the economic and financial costs of the coronavirus crisis.
On the surface, the main dispute concerns whether the EU should issue mutualised “coronabonds” to finance health-care spending and other crisis-related expenditure in the hardest-hit countries
In Italy, coronabonds are viewed as the natural expression of European solidarity.
Rome argues the COVID-19 crisis could not have been expected and Italy therefore deserves help from its European partners.
Germany and the Netherlands, on the other hand, regard coronabonds as a mortal danger, because they would open the door to the dreaded Eurobonds – meaning German and Dutch taxpayers could become liable for Italian debt.
As many wonder whether the eurozone will be able to survive this crisis, unearthed reports reveal how former EU chief Jean-Claude Juncker sparked controversy in 2007, by suggesting that eurozone economic policy was incompatible with democracy.
In the midst of one of the many all-night sessions where European politicians were trying to decide on the next step to take to fix the problems of the eurozone, the then Luxembourg finance minister said: “We all know what to do.
“We just don’t know how to get re-elected after we’ve done it.”
According to a 2008 economic report by the European Commission titled ‘Defying the Juncker curse: Can Reformist Governments be re-elected’, the above quote, attributed to one of Europe’s former leading policy makers, revealed two things.
The report reads: “First, politicians are deeply aware of the need for structural reform in Europe – in particular in the euro area where structural reform has actually slowed down since the inception of the single currency.
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“Second, yet they are reluctant to bite the bullet out of fear to lose the next general elections.”
Mr Juncker served as President of the European Commission from 2014 to 2019 and as the 23rd Prime Minister of Luxembourg from 1995 to 2013.
He was also the Minister for Finances from 1989 to 2009.
The former EU chief returned to headlines last month, after giving an exclusive talk about the EU and the coronavirus to global bank Citi.
Mr Juncker had criticised his predecessor José Manuel Barroso for joining investment bank Goldman Sachs less than two years after stepping down in 2014.
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But the Luxembourg politician gave a speech to bankers just months after stepping down himself last November.
The London Speaker Bureau describes itself as “providing keynote speakers, executive learning masterclasses and boardroom advisers”.
Mr Juncker denied accusations of hypocrisy, telling the Sunday Express: “You have to know that I’m a speaker on behalf of the LSB.
“I’m not a client, or advisor, nor a consultant of Citi or anything else.
“I was supposed to give a speech on behalf of the LSB to an audience, many composed by Citi Bank guys, but I never entered detailed questions concerning the position of the Commission.”
The dial-in conference called Covid-19 & The EU was on April 7. A source said Mr Juncker answered questions around “EU solidarity” triggering the use of the military under EU treaty powers.
He also said the bloc’s limited role in public health was likely to continue and member states were expected to make higher contributions or accept lower grants from it.
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