Paris and Madrid were accused of exploiting the Italian death toll to secure the so-called “corona bonds” mechanism, a joint European debt designed to fight against the deadly disease. It has set up a huge clash between European leaders over how far and fast Brussels should go with a common fiscal solution to tackle the economic fallout triggered by COVID-19. Eurozone finance ministers were unable to agree a firm plan for the bloc’s bailout fund, the European Stability Mechanism, on Tuesday, and have now left the battle to the heads of government, who will hold crunch talks on the subject later this afternoon.

France, Italy, Spain and six other members of the EU’s single currency bloc are pushing for joint debt to be issued as part of the effort to fight coronavirus.

In a joint letter to European Council President Charles Michel, leaders from the nine countries insisted the EU needed “to work on common debt instrument issued by a European institution to raise funds on the market on the sae basis and to benefits of all member states”.

They said the move would ensure “stable long-term financing for the policies required to counter the damages caused by this pandemic”.

But Germany and the Netherlands believe their EU colleagues are moving to quickly, and should leave the most significant measures as a last resort.

One opposition source said: “We have national measures. We have the Commission’s instruments, as a second fallback. We have the European Investment Bank, and other investment instruments.

“The problem is that we’ve been asked to jump immediately to the last resort mechanism while not having exhausted all the options on the road to that last resort.”

The coronavirus measures have become highly controversial because Berlin and the Hague have repeatedly rejected the resurrection of the “eurobond”, which also allows the Eurozone to issue joint debt.

German economy minister Peter Altmaier said the discussion over the measure was a “phantom debate”.

“I urge caution when supposedly new, ingenious concepts are presented which often enough are just long discarded ideas coming back from the dead,” he fumed.

Emmanuel Macron is known as a supporter of a bloc-wide Eurozone budget, which would provide a platform for joint borrowing.

This has sparked accusations that the French President could be using the coronavirus crisis to revive the concept.

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“This common debt instrument should have sufficient size and long maturity to be fully efficient and avoid roll-over risks now as in the future.

“The funds collected will be targeted to finance in all member states the necessary investments in the healthcare system.”



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