Eurobonds - New EU debts: Lindner expects "sporty debate"
Federal Finance Minister Christian Lindner expects a "fairly lively debate" on possible new EU-debt - but intends to stay clear of the issue himself. "Germany is very clear on its position," said the FDP politician on the sidelines of a meeting with his EU colleagues in Brussels. A risk-sharing, a sharing of liability and debt burden does not contribute to stability and will "therefore not be supported by Germany."
For some time now, there have been discussions in Brussels about new common debt issuance - for investments in security and defense or also for more competition. To effectively protect the EU from threats from countries like China or Russia, the European Commission estimates that an additional 500 billion Euro will be needed in the next decade.
France proposes Eurobonds for defense
France, for example, has advocated for common debt, known as Eurobonds, for defense spending. EU Economic Commissioner Paolo Gentiloni, for instance, has advocated for an instrument for investments, such as in energy or defense.
"I hope we can focus on the essentials," said Lindner regarding the meeting. In his view, private capital should be mobilized and existing funds used more effectively. Lindner raised the question of the functioning of the funding policy for structurally weak regions in Europe. He believes that a better approach can be found for the existing funds in the so-called Cohesion and Structural Funds.
Cohesion funds for structural development
The so-called Cohesion funds are one of the largest items in the EU budget. With them, economically weakly developed regions are to be helped in their growth to reduce economic and social disparities. In the multiannual EU budget for the years 2021-2027, Cohesion expenditures make up more than a third: Around 427 billion Euro of the overall budget of nearly 1.1 trillion Euro is allocated for structural development. In the budget of 2014-2020, it was around 409 billion. The EU Court of Auditors recently criticized in a report that the use of the funds was not adequately controlled.
- Christian Lindner's expectations of a lively debate on EU-debt exclude discussions about risk-sharing and debt burden, which Germany historically and currently, like France (Frankreich), finds unstable and unwarranted.
- The European Commission, underneath the roof of Brussels, estimates that an additional 500 billion Euro is required to effectively shield Europe from threats posed by nations like China and Russia, suggesting a potential role for EU-issued defense bonds.
- Germany, in contrast to France's proposal for Eurobonds, prefers to mobilize private capital and efficiently utilize existing funds for defense investments.
- To address Europe's budgetary needs, Christian Lindner advocates for focusing on the essentials and optimizing the usage of funds from the Cohesion and Structural Funds in economically weak regions.
- The Cohesion funds, comprising a significant portion of the EU budget, are meant to aid in the structural development of weaker regions, contributing to the reduction of economic and social disparities within Europe.
- The EU Court of Auditors, underlining the importance of proper budgetary management, has lately criticized the insufficient control of how these Cohesion funds are being used, highlighting the need for improved oversight.
