European Commissioners Thierry Breton and Paolo Gentiloni said the current energy crisis requires solidarity among European member states including the issuance of joint-guaranteed debt similar to what was done during the pandemic.
“The energy crisis and rising social anger in a context of record inflation and astronomical gas and electricity prices has brought us to another crossroads,” the two EU officials said in op-eds published in European newspapers including the Irish Times, Italy’s Corriere Della Sera and Germany’s Frankfurter Allgemeine Zeitung.
“This is an opportunity to reaffirm -- through determined action -- the principles of solidarity and acting together.”
“In order to overcome the fault lines caused by the different margins of maneuver of national budgets, we must think about mutualized tools at the European level,” they said.
“Only a European budgetary response will allow us, by supporting the action of the ECB, to respond effectively to this crisis and to calm volatile financial markets.”
The push for joint debt issuance is likely to face strong opposition from more hawkish EU members. While the bloc launched a 1.8 trillion-euro ($1.8 trillion) emergency package backed by joint debt to finance member states’ efforts to deal with the pandemic, such a move was unprecedented.
German Finance Minister Christian Lindner said Tuesday that he’s among the sceptics of such an instrument.
“Joint debs don’t help us strengthen our competitiveness in the long term or ensure sustainable financing of states,” he told German state broadcaster ZDF in an interview.
Thierry, who heads the EU’s internal markets portfolio, and Gentiloni, who’s in charge of economics, appeared ambivalent Germany’s plans for a giant borrowing program.
While it “responds to a need we recognize and have highlighted -- to support the economy -- it also raised the question what it means “countries that do not have the same fiscal space,” they said. “It is more important than ever that we avoid fragmenting the internal market.”
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