European Union member states have been debating on whether the bloc should agree on issuing new financial instruments to help countries affected with the coronavirus pandemic cope with the economic fallout of the outbreak. A total of nine EU member states, including Italy and Spain, have asked Brussels to issue joint European debt with different securities on a temporary basis to help eurozone economies cope with shut factories and business. CNBC reporter Sivia Amaro said: “Who is asking for this instrument is essentially the most indebted nations, such as Italy, Greece, Spain, Portugal and France.
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“They are hugely arguing that the coronavirus is hitting every country in a similar way which is different from what happened in the debt crisis of 2011.
“Then you hear The Netherlands and Germany asking the others to be cautious.
“They are quite sceptical about joining their beds with countries that are seen at a higher risk of default.
“At the same time, one European diplomat said the European Union should not use all the instruments that they seek because we don’t know how long the coronavirus crisis will actually last.
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“So you need to save some ammunition now to save at a later stage.”
Ms Amaro said sources close to EU negotiators are not expecting member states to come to an agreement, saying member states have a “deep divide” separating them.
She continued: “There is a deep divide in Europe at this stage.
“On the one hand, you have countries who want to mitigate the economic impact of the virus. On the other hand, though, you see other member states saying there is no urgency in developing new fiscal instruments.
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“This conversation is not new but the coronavirus is resurfacing this discussion and adding pressure on leaders to support their economies.
“We saw nine European countries saying that it’s time to issue joint European debt – you can call it corona bond, you can call it euro bond.
“Essentially the idea is that this debt instrument would include different European securities. The specific thing about it is that it would be a temporary tool to deal with the coronavirus outbreak.”
Italy and Spain have become two of the most affected EU member states, with the southern European countries forced to cope with 97,689 and 85,195 cases respectively.
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The Italian Government placed the whole country in lockdown nearly three weeks ago and is expected to extend containment measures well into April.
The number of deaths recorded by Rome fell for the second day in a row on Sunday, down to 756 from 889 on Saturday and a dramatic 969 recorded on Friday.
Italian officials warned if the restrictions had not been enforced, the death toll could have been even higher than it is at the moment.
Civil Protection head Angelo Borrelli said: “Without these measures, we would be seeing far worse numbers and our health service would be in a far more dramatic state.
“We would have been in an unsustainable situation.”
Spain, however, saw the number of COVID-19 sufferers increase exponentially over the past two weeks, with Madrid reporting 838 people have died in the past 24 hours.
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