In a recent interview, Academic Co-Director Iain Begg explains Merkel’s stance on debt pooling, and analyses the more conservative counter-proposal suggested by the ‘frugal four’ in a response to the Franco-German economic recovery plan.
Last week, the Franco-German COVID-19 economic recovery plan was announced. The plan comprises European debt pooling, an idea that Angela Merkel has strongly opposed in the past. However, the unprecedented crisis of COVID-19 and its economic consequences have led to a shift in priorities for the German leader.
While it is a rare sight to behold for Germany and France to come together on a topic such as this one, the proposal has not been unilaterally accepted by EU member states. This past weekend, the “frugal four”, Denmark, Sweden, Austria, and the Netherlands, presented a counter-proposal, wherein risk-sharing is eliminated.
To find out more about the expected consequences of this proposal, or to better understand Merkel’s change of heart, read the full interview in French here.
On May 21st, Academic Co-Director Iain Begg was quoted in this piece in the Economist “Who will pay for the pandemic? The Merkel-Macron plan to bail out Europe is surprisingly ambitious“.
The article considers the EU’s proposal for a COVID-19 economic recovery plan, spearheaded by the French and German leaders. Macron and Merkel, who have not seen eye to eye on EU policy and the future of the union over the past few years, reached a compromise on a €500bn recovery fund. While Merkel was unwilling to go as far as the corona bonds Macron pushed for, Begg explains how Germany’s support for the recovery fund demonstrates an “enormous shift in principle”.