https://www.spiegel.de/international/eu ... 421ef3d2e'North-South Divide
Calls for Corona Bonds Met with Familiar "Nein"The danger of a new euro crisis is growing. Weak member states like Italy need help if they're going to survive the coronavirus lockdown financially. But the call for euro bonds has been met with stiff resistance -- especially from the Germans.
By Frank Hornig, Armin Mahler, Peter Müller, Anton Rainer und Christian Reiermann, 27.03.2020.
On Monday, Adrio Pierantoni wanted to know what the government could do for him. Like almost all Italian companies that don't produce medicine or food, Pierantoni was forced to close his small shop in the town of Fano on the Adriatic coast. It was the latest in a series of measures designed to contain the outbreak of the coronavirus, measures that have brought the Italian economy to a standstill. Pierantoni crunched the numbers. He calculated his missing sales, his outstanding loans, the difficult situation for his employees and suppliers -- and called his tax adviser. "We just wanted to ask how much support we could count on," he says. He didn't have to wait long for an answer. Pierantoni could theoretically expect to receive 600 euros ($660) once the forms finally arrived. His company, on the other hand, would get nothing.
Pierantoni's company, Zeppelin, has been around for more than 20 years. It makes tailor-made furniture for Milanese furniture stores. The company is healthy. Normally it wouldn't need any help from the state. But closed stores don't need furniture, which is why Pierantoni urgently needs money. "Six hundred euros wouldn't even pay the electricity bill now," he says. The entrepreneur often finds himself looking to Germany these days. He runs the company with his wife Gabi, a German from the southern town of Rastatt. They met through a sister-city program. Germany is also home to important customers and business partners of Zeppelin's -- as well as politicians who pass laws that Pierantoni would like to see Italy adopt. Things like protective economic measures, relief funds and billion-euro bailouts. As for the number of people infected with coronavirus, Pierantoni believes Germany is two weeks behind Italy. But as far as subsidies for the economy are concerned, "it's months ahead of us."Two Very Different Approaches
Pierantoni gets to see first-hand how the two countries are dealing with the economic consequences of the coronavirus. Or rather, how they're able to deal with the crisis.
In Germany, money seems to be no object. On Wednesday, German lawmakers passed a supplementary budget of 156 billion euros to mitigate the shock to the country's economy. In total, the German government will provide economic aid worth 1.8 trillion euros.
Italy doesn't have these kinds of options. The country's debt load is 130 percent greater than its gross domestic product (GDP). Its financial leeway is limited. The European Commission has waived all debt requirements for member states so that national governments can borrow at will. But this will only work as long as creditors are willing to lend money to countries at reasonable rates.
Italy, as well as France, Spain and Portugal, could soon reach their limits. In view of the heavy burdens that will be placed on countries, doubts in the markets are likely to grow as to whether they'll ever be able to repay their debts. This same fear took hold of the financial markets after the collapse of Lehman Brothers. It nearly destroyed the currency union.