Varadkar: EU must unleash financial firepower

Leaders hold crunch talks today on €1.5 trillion recovery package
Varadkar: EU must unleash financial firepower
Leo Varadkar: Ireland is very much among those countries that believe that if there’s ever a time for the European Union to stand together, even if it’s only for the purposes of the pandemic and healthcare, now is the time.”

EU leaders have to unleash the bloc’s full financial firepower to help economies reeling from the Covid-19 crisis to get back on track.

The warning from Taoiseach Leo Varadkar comes ahead of crunch talks today about a potential €1.5 trillion package to tackle the fallout from the pandemic.

"I’d be strongly of the view that Europe needs a much stronger economic response that we’ve had from the European Union to date, and that involves money," he said.

“And that’s what we’re going to have to talk about —how we can use the European Union’s financial firepower to assist countries in real trouble, particularly Mediterranean, but also every country in the European Union is going to need help to get their economies back on track,” he said

In an inherent criticism of Germany and the Netherlands, which have blocked proposals to help other countries, Mr Varadkar said now is the time for Europe to stand together.

“But we are, of course, running into those same difficulties.

"But we always have when it comes to these questions, some countries not wanting to share a debt, some countries not wanting to pool our borrowing capacity, and Ireland is very much among those countries that believe that if there’s ever a time for the European Union to stand together, ever a time for us to assemble our firepower and to mutualise some debt, even if it’s only for the purposes of the pandemic and healthcare, now is the time,” he said.

Ireland also desperately needs the EU to agree on a recovery package after the Department of Finance and the IMF pointed to Irish unemployment rising and staying at multiples of the levels of Britain or Germany.

The Government faces its budget deficit widening at a minimum to €23bn this year, according to its own figures. The outcome will be a lot worse in the absence of an EU recovery package.

Mairead McGuinness, vice-president of the European Parliament, told the Irish Examiner that “the eyes of the world were on the EU leaders”.

“If it is only a piecemeal recovery, it will not meet anyone’s needs,” said Ms McGuinness, citing Irish food producers who rely on markets across Europe.

Ben Tonra, professor of international relations at UCD, said it appears that EU leaders have not yet “grasped the nettle” to agree on ways to fund the recovery programme.

“The stakes have never been higher,” he said.

“We are in the middle of this crisis which is having huge political and economic ramifications. If the Union can’t step up to this in political and economic terms, I don’t think it collapses but it would rob it of meaning and purpose.”

However, fears are rising that EU leaders will defer the decision on ways to fund the package.

Sources in Brussels indicated that key divisions between northern and southern European states on finding ways to share the burden of the costs will be deferred to April 29, or maybe for many months longer.

However, Mr Varadkar said that a lot of proposals were being put forward.

“Some people have put forward a proposal of using our existing European funding mechanisms,” he said.

“That would allow the European Commission to borrow on behalf of the European Union as a whole if you like, that would free up money that could be used to stimulate economies and then be paid back at a European level.”

Meanwhile, the death toll from Covid-19 in the country has risen to 769 after a further 49 deaths were notified to the Department of Health. Of these, 412 (53%) related to either long-term residential care settings or nursing homes.

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