Two top European Commission officials called on Tuesday for joint borrowing by the twenty seven nations European Union (EU) to finance a response to the energy price crisis that is threatening to plunge the block into recession.
European Economic Commissioner Paolo Gentiloni and Internal Market Commissioner Thierry Breton said the new borrowing could be modelled on the joint debt issued during the COVID-19 pandemic to subsidise jobs that would have otherwise been lost.
Their proposal comes as Germany’s massive 200 billion euros ($197.4 billion) support package for households and companies raises concern among other EU governments, unable to match that support, about the fairness of competition in the single market.
The two commissioners wrote “Faced with the colossal challenges before us, there is only one possible response that of a Europe of solidarity. In order to overcome the fault lines caused by the different margins of manoeuvre of national budgets, we must think about mutualised tools at the European level,” they wrote.
During the pandemic, the EU jointly borrowed 100 billion euros at very low cost under its SURE scheme and lent the money on to governments to subsidise salaries of workers during the economic slump.
