14.04.2020 | Rift fears as eurozone bailout fund is sunk
by Ambrose Evans-Pritchard - The Telegraph
The eurozone’s emergency plan to fight Covid-19 has unravelled within days. Italy’s prime minister has rejected the central element of the €540bn (£470bn) package as a “trap”.
No Italian leader in the current febrile mood could accept it and survive for long. The country’s parliament would in any case reject the terms.
The minimalist array of loans – unwisely sold by Eurogroup finance ministers last week as a historic breakthrough – scarcely moves the macroeconomic needle. “The deal is an admission of European inadequacy,” said professor Adam Tooze, of Columbia University.
The plan eschews joint debt issuance and amounts to extra debt foisted on states already at the outer boundaries of debt sustainability, pushing them further into a “bad equilibrium”.
The article's full text is available: www.telegraph.co.uk/business/2020/04/14/rift-fears-eurozone-bailout-fund-sunk2/