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German CDU leader and chancellor hopeful Friedrich Merz pledged on Wednesday (11 September) to do “everything I can” to prevent the permanent issuing of EU joint debt, after the idea featured prominently in Mario Draghi’s report on European competitiveness earlier this week.
Speaking at a debate in the German Bundestag on Wednesday, Merz picked up the proposal to create a permanent joint EU borrowing instrument, which Draghi argued was necessary to fund EU priorities and to help integrate European capital markets.
“I want to say this very clearly, now and in the future, I will do everything I can to prevent this European Union from spiralling into debt,” Merz said.
Merz described the €800 billion “Next Generation EU” joint borrowing scheme, agreed upon during the Covid crisis, as “an exception.”
“But what Mr Draghi proposed […] is not covered by the current provisions of the European treaties,” Merz said, adding: “We have a ban on borrowing in Europe.”
“I can only say on behalf of my group and also on behalf of the European People’s Party: I will do everything to prevent Europe from going down the path of such debt,” he concluded.
While Merz is echoing similar arguments from members of the European Parliament from centre-right EPP group, EPP members from southern Europe have already expressed support for a new round of joint borrowing.
“Through Eurobonds, we could make considerable economic resources available for Europe’s growth,” Marco Falcone, head of Forza Italia’s (EPP) delegation to the European Parliament, told Euractiv.
Forza Italia had spoken out in favour of joint borrowing in its election manifesto for the European elections in June.
Similiarly, Hélder Sousa Silva, an EPP legislator from Portugal and member of the European Parliament’s budget committee, told Euractiv on Monday that he “strongly support[s] the call for common debt mechanisms, such as EU defence bonds, to finance our strategic initiatives.”
Earlier this week, German finance minister Christian Lindner (FDP/Renew Europe) already voiced his opposition to joint borrowing, arguing that it “will not solve structural problems: companies do not lack subsidies.”
Meanwhile, his cabinet colleague, Economy Minister Robert Habeck (Greens), expressed support for Draghi’s proposals.
German Chancellor Olaf Scholz (SPD/S&D) made no mention of the matter in his speech to the Bundestag on Wednesday.
[Edited by Owen Morgan]
