President of the European Council Charles Michel and EU Secretary General of the EU Council Jeppe Tranholm-Mikkelsen during a video conference with EU leaders yesterday
For ordinary people, frightened for their health, the safety of their loved ones, worrying about their rent and feeding their family after businesses shut down, the idea that Europe’s leaders spent six hours on Thursday night, squabbling over the wording of their summit conclusions in order to defer a key decision over coronavirus funds, will be incomprehensible.
Spain and Italy – ravaged by the effects of the virus on their populations and their limited public finances – were deeply disappointed. Italy was already one of the EU’s most Eurosceptic member states before Covid-19 hit.
Italian Twitter was littered with expletives on Thursday – and those were just the posts from politicians.
Now, its economy is at an enforced standstill in an effort to break the back of the epidemic. But its troubles won’t end when the virus has run its course. Given the prominence of tourism in the Italian economy (13 percent of Italy’s GDP versus 8.6 percent of Germany’s), the country faces a much harder long-term headwind to return to prosperity than many other EU states.
These would be daunting problems for a country with sovereign control of its currency. But Italy, as a Eurozone member, does not have any such control.
The Italian state cannot print money to sustain its citizenry while the economy is in lockdown. It has to beg Brussels for permission to spend — and Europe’s finance ministers are bickering about the terms under which such spending would be permitted in much the same manner that America’s senators have been.
Pic via EU