Dispute over “double tree”
EU wants joint debt for gas aid – Lindner on the other hand
The protective shield against high energy prices is also a “double tree” in the minds of many EU countries. They fear that this will put them further behind wealthy Germany. They demand a European solution with common debts. Treasury Secretary Lindner almost had an allergic reaction.
Federal Treasury Secretary Christian Lindner has rejected the European Commission’s demand to fund an energy crisis relief program through joint debt. The EU cannot transfer the tools of the corona pandemic “one-on-one” to the current situation, the FDP leader said at the meeting of EU finance ministers in Luxembourg. “This crisis is very different from the corona pandemic.”
In the Corona crisis, the EU has set up a reconstruction fund of 750 billion euros. It is financed by community debt contracted by the European Commission. In 2020, the federal government approved joint debt for the first time, stressing that it was a one-time exception. Due to joint debts, Germany is also liable for other EU member states. In contrast, Lindner now advocated joint gas purchases. “We need to make progress on joint gas procurement,” he said.
EU economics commissioner Paolo Gentiloni, on the other hand, once again called for a European solution to the energy crisis. “If we want to avoid fragmentation and face these crises, I think we need a higher level of solidarity and we need to introduce other common tools.” As an example, he cited the Sure programme, which enabled short-time working programs during the pandemic through cheap EU loans. However, Lindner does not currently consider proposals based on the Sure program to be suitable, as he clarified in Luxembourg.
Fear: Germany gets an advantage
Gentiloni and internal market commissioner Thierry Breton had campaigned for debt-based “European instruments” in the Frankfurter Allgemeine Zeitung last Tuesday. There are “member states that do not have the same fiscal leeway as Germany” and therefore may not be able to support their consumers and the economy equally, the text says. “More than ever, we must avoid distortions of competition in the internal market,” warn the two Commissioners. “We must not start a subsidy race and thereby question the principles of solidarity and unity that underlie the success of our European project.”
Germany had previously received much criticism from other EU countries and also from the Commission for its €200 billion defense shield, which Chancellor Olaf Scholz described as a “double boom”. It is intended to protect households and businesses against high energy prices. Because Russia hardly supplies any gas to Europe anymore, gas and electricity prices have risen sharply. It was now feared that Germany could use the aid package to gain an advantage over other countries.
In particular, concerns are expressed that Germany is supporting its businesses on a scale that smaller countries cannot compete with. Countries such as Italy, Spain or France are therefore calling for joint measures – there is also talk of a European gas price ceiling, which the federal government has been skeptical about until now. The EU countries had already agreed to joint gas purchases in March, but a joint coordination platform has not yet provided much concrete information.
Lindner said in Luxembourg that many “hadn’t noticed” that the $200 billion defense shield was targeting until 2024. The EU commission has “not yet fully recognized” that it is not just a 2022 measure.