Brussels (Brussels Morning) Germany’s Chancellor Angela Merkel commenting on the EU’s joint borrowing plan in the Bundestag on Thursday, stressed that it must remain a one-off event, Reuters reports.
The borrowing plan would help EU member states to overcome and recover from the coronavirus crisis, she acknowledged, but it was important to understand that it cannot and should not be repeated.
Addressing the lower house before it voted on and approved the plan for absorbing EU aid, Merkel spoke plainly and to the point: “in the debate today, it will be made clear again that the recovery fund is a one-off instrument limited in time and purpose”.
The upper house is expected to pass the plan later this week.
A different take
While Merkel remains adamant that the EU not take on joint debt to tackle common problems in the future, Finance Minister Olaf Scholz, the acting head of the Social Democratic Party and a candidate to succeed Merkel, favours strengthening relations with Europe as one of his top priorities.
Scholz, who previously has indicated that he does not see the bloc’s recovery plan as a one-off, was involved in the creation of the blueprint enabling the EC to take on joint debt by allowing it to borrow up to 750 billion euro on capital markets.
The EC can link payments to EU member states in the form of grants and loans for jointly agreed investment and reform plans.
According to the plan, the money is to be repaid from the EU budget. This means that Germany will cover approximately 27% of repayment, significantly more than any other member state.
Plan could be delayed
Germany’s absorption of the funds could be delayed as the Alternative for Germany group has announced it is filing a constitutional complaint against the law.
Comerzbank senior economist Christoph Weil claims “there is much to suggest” that President Frank-Walter Steinmeier will not greenlight the law before the Federal Constitutional Court rules on it. Nonetheless, in his view, the complaint is unlikely to stop the legislation, although it could delay its implementation.