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Chancellor Merkel Says Germany Can Take on More Debt To Fund EU Recovery

"In these circumstances, it is only right for Germany to think not just about itself but to be prepared to engage in an extraordinary act of solidarity,” said Chancellor Merkel.

Image: German Chancellor Angela Merkel

BERLIN (AP) — German Chancellor Angela Merkel says her country can afford to take on more debt to help fund an unprecedented economic recovery program for the European Union, because it’s in Germany’s own interest to see the bloc thrive.

In an interview with six European newspapers released Friday, the long-time German leader said that “the coronavirus pandemic is confronting us with a challenge of unprecedented dimensions.”

The EU’s economies, like those of countries around the world, have slumped dramatically since the start of the outbreak.

Merkel and French President Emmanuel Macron last month proposed creating a one-off 500 billion-euro ($543 billion) recovery fund that would be filled through shared borrowing with other EU member countries. Such a move breaks with Germany’s long-standing opposition to joint borrowing.

In her interview with Germany’s Sueddeutsche Zeitung, Britain’s Guardian, Le Monde in France, Italy’s La Stampa, La Vanguardia from Spain and Poland’s Polityka newspaper, Merkel said it was right that those countries that have been particularly hard-hit by the pandemic should receive special consideration from the recovery fund.

“For Italy and Spain, for example, the coronavirus pandemic signifies a huge burden in economic, medical and, of course, because of the many lives lost, emotional terms,” she said. “In these circumstances, it is only right for Germany to think not just about itself but to be prepared to engage in an extraordinary act of solidarity.”

Merkel insisted that while the fund “cannot solve all of Europe’s problems,” without it they would only get worse.

“Germany had a low debt ratio and can afford, in this extraordinary situation, to take on some more debt,” she said, adding: “It is in Germany’s interest to have a strong internal market and to have the European Union grow closer together, not fall apart. As ever, what’s good for Europe is good for us.”

Merkel dismissed the suggestion that the EU may be facing one crisis too many, saying that “rather than ask the existential question too often, we should get on with the day job.”

Asked about who should become the next head of the eurogroup, the body made up of the single currency bloc’s finance ministers, Merkel said that “it is no secret that there is support for (Spanish Economy Minister) Nadia Calviño’s candidature in the German government.”

“I am always pleased when women get leading political roles, and the eurogroup has never been headed by a woman,” said Merkel. “But it’s not my decision. This is for the eurogroup to decide.”

In the wide-ranging interview, Merkel also touched on Europe’s geopolitical position in relation to China, Russia and the United States.

The EU “should develop a policy that reflects our interests and values” on China, she said. “After all, respect for human rights, the rule of law and our concerns about the future of Hong Kong stand between China and ourselves and are addressed openly.”

Merkel insisted that Germany remains committed to ties with the United States and the NATO alliance, but acknowledged that Europe needs to bear more of the burden than in the past.

“We grew up in the certain knowledge that the United States wanted to be a world power,” she said. “Should the U.S, now wish to withdraw from that role of its own free will, we would have to reflect on that very deeply.”

Merkel expressed disquiet about Russia’s recent behavior, including an apparent targeted assassination in the heart of Berlin, the blame for which is currently being ascertained in court.

”At any rate, we recognize hybrid warfare, methods of destabilization, as a Russian behavior pattern,” she said, but added there were good reasons to seek “constructive dialogue” with Moscow.

Merkel, who has said she won’t run for a fifth term in national elections next year, said she wouldn’t consider a ‘no-deal’ Brexit at the end of this year a personal defeat. She repeated her warning that whichever choice London makes about its future relationship with the EU, “it will then have to live with the consequences, of course.”


Source: Reuters

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