BERLIN (Reuters) – The European Union’s plan to take on joint debt on a large scale and channel the money to member states worst hit by COVID-19 is the right way to overcome the crisis, but it must remain a “one-off” tool, German Chancellor Angela Merkel said on Thursday.
Speaking to the Bundestag lower house of parliament ahead of a final vote on the plan, Merkel urged lawmakers to ratify the legislation for the EU decision as it would provide additional money needed to support the recovery.
“In the debate today, it will be made clear again that the recovery fund is a one-off instrument limited in time and purpose,” she said, adding that it was an “indispensable” tool to help overcome the economic crisis caused by COVID-19.
Her remarks drew applause from lawmakers in her ruling conservative bloc and from the centre-left Social Democrats (SPD), junior partner in her grand coalition.
The question of whether the EU should take on joint debt in the future also for other tasks is likely to be one of the key campaign topics ahead of a German federal election in September.
Finance Minister Olaf Scholz, the SPD candidate to become the next chancellor, has said that strengthening relations within Europe would be one of his top priorities as German leader. He has also hinted that he doesn’t view the European Recovery Fund with jointly issued debt as a one-off event.
Scholz was one of the key architects of a Franco-German blueprint to enable the European Commission to take on joint debt and channel the money to member states worst hit by COVID-19. That plan paved the way for the agreement among EU leaders last summer.
(Reporting by Paul Carrel and Michael Nienaber; Editing by Gareth Jones)
