EP’s President Sassoli says joint borrowing should be made permanent
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Joint borrowing by European Union member states to overcome the economic shock caused by the COVID-19 pandemic should become permanent, European Parliament President David Sassoli was quoted on Sunday as saying.
EU leaders agreed on an unprecedented 750 billion euro ($887 billion) recovery package funded by joint debt issuance to help weather the COVID-induced recession. Germany had previously strongly resisted issuing joint debt.
“It is necessary to make common debt issuance permanent and to create a Treasury at the European level,” Sassoli, an Italian centre-left politician, told Italian newspaper La Repubblica in an interview.
Last month, European Central Bank President Christine Lagarde said European leaders should consider making the recovery fund permanent.
However, the head of Germany’s Bundesbank, Jens Weidmann, said soon after Lagarde’s comment that large-scale joint EU borrowing should remain a one-off.
Asked whether the debt contracted by EU member states to tackle the recession caused by the COVID-19 pandemic should be cancelled, Sassoli said: “This is an interesting working hypothesis, to be reconciled with the cardinal principle of debt sustainability.”
