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EU struggles to build unified virus response

Dave CLARK
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Conte said he and German Chancellor Angela Merkel had 'not just a disagreement but a hard a frank confrontation' this week about how to proceed

Conte said he and German Chancellor Angela Merkel had 'not just a disagreement but a hard a frank confrontation' this week about how to proceed (AFP Photo/Handout)

Brussels (AFP) - European Union leaders struggled to build a unified response to the coronavirus epidemic on Thursday, as hardest-hit Italy and Spain objected that a draft economic plan was too weak.

The 27 leaders were taking part in a videoconference hosted by EU Council president Charles Michel to agree a broad outline but Madrid and Rome are blocking a draft joint statement, diplomats said.

According to Prime Minister Giuseppe Conte's office, the Italian leader wants a "strong and sufficient" financial response that deploys "innovative financial instruments truly adapted to a war".

With the backing of Spain, Italy wants the "Five Presidents" -- the heads of the European Council, Commission, Parliament, Central Bank and the Eurogroup -- to take 10 days to come up with a bigger plan.

But northern countries, led by Germany and the Netherlands, are resisting what they see as efforts by their southern neighbours to push long-standing demands for eurozone members to pool public debt.

- 'There for each other' -

Three hours after a news conference planned to mark the end of the video-summit was first scheduled, the leaders were still debating online, officials said.

Meanwhile, hundreds of millions of the bloc's citizens are holed up at home, during lockdowns imposed to help slow the pandemic that has killed more than 15,000 Europeans and crippled business life.

As the global outbreak first took hold, member states privileged national responses by shutting borders, hoarding medical supplies and waving through major spending plans regardless of EU rules.

"When Europe really needed to be there for each other, too many initially looked out for themselves," European Commission chief Ursula von der Leyen said ahead of the talks.

"When Europe really needed an 'all for one' spirit, too many initially gave an 'only for me' response," she added, speaking at a sparsely attended session of the European Parliament.

The former German defence minister said Brussels was now trying to build a more unified approach and leaders will use video talks to put that into action.

According to a draft statement, measures should include building an emergency stock of medical equipment and easing inter-EU border closures.

They will also rubber stamp the suspension of EU deficit rules that will allow countries to spend freely to fight the virus regardless of, in some cases, already yawning budget deficits.

The 27 leaders will task EU officials to work on an "exit strategy" and recovery plan to help rebuild the economy after the havoc wrought by COVID-19 and the drastic measures taken to fight it.

But some want to go further.

At a videoconference last week, Conte suggested the creation of "corona bonds" that would pool the debt of the 19 countries in the eurozone.

- 'Indecently ideological' -

In a another call for solidarity ahead of the talks, nine EU leaders had said any economic plan should include the launch of joint borrowing by members of the euro single currency.

But that proposal was rejected behind the scenes by Germany, the Netherlands and other rich northern members, who slam it as indecently "ideological" during a health crisis.

France, Spain and Italy have long called for a some kind of eurobond that would in effect allow joint borrowing by the 19 members of the euro single currency.

They say it could serve as the bedrock of a safer and more unified European economy and would become a globally respected asset on par with the US Treasury bills.

But wealthier members see the eurobond as an attempt by over-spending southerners to take advantage of the cheap borrowing rates enjoyed by Germany and other paragons of balanced budgets.

"It is always nice to have nine leaders write letters. But nine is not 27, it is not even a majority," one diplomat said.

"Tonight, leaders will want to show unity and will concentrate on areas where they can find consensus and not on divisive issues like eurobonds."