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A Spanish proposal for Brussels to borrow as much as €850 billion each year to fund growth has revived a longstanding debate over common EU debt.
But the prospect of joint borrowing continues to divide member states. A group of southern countries – which also includes France – is advocating for more joint debt to strengthen competitiveness, while another group of frugal, northern countries is vehemently opposed, calling for stricter rules and fiscal discipline.
In this episode of The Ring, Euronews’ weekly debate show, two MEPs from these opposing camps go head to head.
Markus Ferber, a German Conservative, argued that more borrowing will pile more pressure on public finances and fail to address the root causes of slow growth, calling instead for spending reforms.
Pasquale Tridico, an Italian MEP hailing from the Five Star Movement party, described public debt as “one of the most important tools for economic growth” and called for expanding its use.
“We need to accept common debt. It is not a matter only of solidarity, it is a matter of a well-built economy,” MEP Tridico said.
Ferber meanwhile said that since the EU is looking to delay repayments of Covid-era joint debt, known as Next Generation funds, the markets “will not trust us” with more borrowing.
“I wish you all the best to go to the market asking for money,” he said. “But refinancing, repayment, sorry, the market will ask for high interest rates.”
Both MEPs weighed in on the fierce global competition facing Europe and the damaging impact on the bloc’s industries and economy.
Chinese industrial overcapacity, driven by heavy-handed state subsidies, is flooding the EU market with cheap exports and posing an existential threat to manufacturing industries.
The EU executive is weighing a firm response, but has set an October deadline to get “tangible” results in talks with Beijing.
“We are not doing enough (on China) because we are not using the only asset we have, which is the Single Market,” Ferber said. He argued that barriers within the EU’s own Single Market are so significant that they have an economic impact equivalent to imposing 45% tariffs on trade within the bloc.
This episode of The Ring is hosted by Mared Gwyn, produced by Luis Albertos Altarejos and Amaia Echevarria, and edited by Vassilis Glynos.
You can contact us at: [email protected].
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