France’s Macron Pushes Financial Unity During Pandemic

French president Emmanuel Macron has warned that the European Union (EU) is likely to fail in its goals as a “political project” if the group doesn’t work together in supporting economies hit particularly hard by the pandemic.

Macron told the Financial Times he supports a common fund between all EU members that could issue common debt with a common guarantee. He wants to see a fund that supports members based on need rather than the size of their economy.

Other members like Germany and the Netherlands have opposed this, with the opinion that the idea would end up putting citizens into a liable position for other countries’ economies.

Macron’s idea entails a €400 billion fund along with the assistance offered by central banks. The hope, he said, is to mitigate the fallout from the coronavirus shutdowns and ensuing economic strife. Spain and Italy have backed the idea. Italy has been hit particularly hard, with one of the world’s highest death counts from COVID-19, the disease caused by the coronavirus, so far.

Macron said it was impossible to continue under the current situation, which he described as a “single market where some are sacrificed,” and called for a mutualized fund ready to take on the common threat of the coronavirus. That would be the right course as opposed to a historical wrong example such as France’s demands of Germany after World War II that “the sinners must pay,” which triggered a populist revolution and even more unrest.

Now, Macron said, populists could be on the cusp of winning again “today, tomorrow, the day after” in Italy, Spain and other countries, if action is not taken.

Already, some adverse effects are taking place as investors sell off government bonds in Italy, Greece, Spain and Portugal, fearing the worst for their ability to sustain public debt. This has had the effect of widening a chasm between the worth of Italian bonds and safer German ones.

Macron’s words come as many EU member states are talking about how to reopen their economies as the coronavirus looks to be slowing.