Portugal joins eight other in EU requesting European debt issue

Portugal’s prime minister, António Costa, and eight other European leaders signed a letter on Wednesday to the president of the European Council calling for the implementation of a common European debt issuance instrument to tackle the crisis caused by Covid-19.

In a letter sent to Charles Michel on the eve of a European Council devoted to the European response to the coronavirus pandemic – to be held by videoconference on Thursday – the heads of state and government of Portugal, France, Italy, Spain, Belgium, Luxembourg, Ireland, Greece and Slovenia argued that, given the gravity of the situation, in addition to the measures already taken, it is necessary to move towards a common debt instrument, issued by a European institution, to raise funds in the market on the same basis and for the benefit of all member states.

According to the eight European leaders, such an instrument would ensure stable long-term funding for the policies needed to cope with the damage caused by this pandemic, under the same conditions for all member states.

In his opinion, the arguments in favour of a common debt issuance instrument are strong as all countries are facing a systemic external shock, for which no country is responsible, but that impacts them all.

“This common debt instrument should be large enough and have a long maturity to be fully efficient,” they said, adding that the funds collected through this European bond issue would be used exclusively to finance, in all member states, the necessary investments in health systems and temporary policies to protect European economies and social models.

“By giving a clear message that we are facing this unique shock together, we would strengthen the European Union and Economic and Monetary Union and, even more importantly, we would send a strong message to our citizens,” PM Costa, the French President Emmanuel Macron, and the heads of government Giuseppe Conte (Italy), Pedro Sánchez (Spain), Sophie Wilmès (Belgium), Xavier Bettel (Luxembourg), Leo Varadkar (Ireland), Kyriakos Mitsotakis (Greece) and Janez Jansa (Slovenia) said.