by N. Peter Kramer
Governments in EU member states have been given the green light by the European Commission, since the lockdown and the resulting economic damage, to give €1,900 billion in guarantees, loans and gifts to national businesses. Under ‘normal’ strict EU single market rules, governments are not allowed to grant state aid to avoid unfair competition between countries; but in today’s special situation the Commission had very little choice but to give consent for it. Merkel’s government used the opportunity and made nearly €1,000 billion available for troubled German businesses.
European Commission President Ursula von der Leyen warned in the European Parliament last week that countries with lower public debt will do best from the Corona crisis. Germany, The Netherlands and Scandinavian member states have, thanks to many years of often severe budgetary policies, money to keep struggling businesses afloat. Southern member states with a high public debt due to years of ignoring such policies, do not have wherewithal
President Von der Leyen pointed out that southern Europe is hit harder by the lockdowns than northern Europe. According to her, therefore, northern Europe must not only save its own economies but also contribute to those in the south. Otherwise businesses in, say, France, Italy and Spain could go bankrupt with northern European businesses having the chance to gain market share in the South. President von der Leyen told the EP, that in the Commission’s opinion, this is a bad thing.
Once again Ursula von der Leyen shows herself to be the mouthpiece of French President Emmanuel Macron. He has pleaded repeatedly on behalf of nine southern European indebted countries for financial transfers from north to south. In the form of gifts of course. He and the Commission President overlook the fact that the taxpayers in the north are also voters, in Von der Leyen’s Germany as well.
