Taoiseach calls for 'balance between loans and grants' in any EU Covid-19 rescue package

Leo Varadkar who has taken part in four videoconferences to discuss the pandemic with European leaders, said that "when this emergency started the level of coordination across the European Union was poor"
Taoiseach calls for 'balance between loans and grants'  in any EU Covid-19 rescue package

The European Union has come under fire from across the Dáil over its response to the Coronavirus pandemic and recovery funds.

The Dáil heard that "alarm bells are ringing", that the EU have "not learned any lessons" from the last recession in Ireland during the 2007 financial crash.

Leo Varadkar who has taken part in four videoconferences to discuss the pandemic with European leaders, said that "when this emergency started the level of coordination across the European Union was poor", before adding that the union have acted better than they did during the financial crash, when they "acted in a way that was too little and too late".

Mr Varadkar noted "there were strongly held different views around the table" on how a rescue package should be financed.

The Euro-zone rescue deal has exposed divisions in member states, where Italy and Spain, who have been severely hit by the virus, have accused northern nations - led by Germany and the Netherlands - of not doing enough.

Germany and the Netherlands are the vocal opponents to the idea of “coronabonds", while at least another nine EU nations have said the new debt instrument, which would see pooled repayments and borrowing to avoid poorer countries slipping into severe debt, is needed to mitigate the oncoming recession.

So far, a €200bn European Investment Bank (EIB) Covid-19 guarantee fund for crisis lending to SMEs, mid-cap companies and corporates, underpinned by €25bn in member states has been confirmed.

A €240bn European Stability Mechanism for pandemic crisis support, which will see a new series of pandemic credit lines offered via loans to euro area countries has also been approved.

"Some believe there should be transfers from other countries to those countries most affected in the form of grants, others expressed the view that loans were the only acceptable options to their citizens," Mr Varadkar added, noting he felt "the right balance between loans and grants, is what we should aim for."

Fianna Fáil leader Micheal Martin was critical of many aspects of the EU's response, noting; "the failure of leaders to agree a radical response should be a concern to everyone", and what has been agreed goes "nowhere near" what Europe needs.

Mr Martin hit out at Hungary, who have suspended parliament and implemented severe censorship measures, which he labelled "a major breach of the core EU democratic principles", and criticised the European Council for not acting on Hungarian leader Viktor Orban's actions.

Mary Lou McDonald added that "the EU was no great friend to Ireland or its people" during the last recession, and spoke out against any return to austerity".

Green Party TD Roderic O'Gorman also criticised member states who voted against states borrowing to recover from the crisis, saying the stance lacked "solidarity".

The Labour Party also called for solidarity among member states, and said the EU must use Covid-19 to break traditional hostilities, using Cuba as an example, who sent doctors and medics to Italy to help fight the virus outbreak in Lombardy, adding that Cuba should now receive relief from sanctions in exchange.

"We believe the EU should be leaders on this," Duncan Smith said.

Social Democrat co-leader Catherine Murphy said the response has to be "large enough" and not all member states were impacted in the same way.

Noting Italy's national debt, she said that Italy should not be forced to take on more debt, comparing it to Ireland's experience during the last recession under austerity measures, she said: "There are signs of the same kind of thinking, that we should be very concerned about".

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