Corona aid plan: Conte contradicts Merkel – and becomes clear in the process

In Italy, the debate over the possible use of the ESM divides the government coalition. The five-star movement speaks out against it, while the coalition partner, the Democratic Party, is in favor of it.

Each country in the monetary union can access low-interest loans amounting to two percent of its economic output through the ESM. However, countries like Italy fear that a request for help on the financial markets will be interpreted as a signal of massive financial difficulties and could lead speculators to the scene. So far, no euro government has shown any interest in ESM aid in the crisis.

The EU countries are currently negotiating a multi-billion dollar corona relief plan, which is primarily intended to support Italy and Spain, which have been hit particularly hard by the pandemic. However, the EU Commission’s proposal for the massive reconstruction fund is highly controversial among the member states, partly because the aid is to flow partly as grants and not as loans.

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