Merkel-Macron plan splitting Europe / News / News agency Inforos
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Merkel-Macron plan splitting Europe

German confidence in EU falls during pandemic

Merkel-Macron plan splitting Europe

Rankings published in Germany over the weekend indicate continued growth of popular support for Chancellor Angela Merkel and her government during the COVID-19 pandemic. According to a study commissioned by RTL/NTV, 72 per cent of Germans currently have "strong confidence" in her personally, while 60 per cent of the country's citizens trust the government as a whole. In comparison with January, the growth of this indicator accounts for 22 and 26 per cent respectively. Tellingly, the level of German confidence in the European Union is on the wane at the same time. For the time being, it has fallen to 37 per cent.

There is no doubt that the recent clash between the European Commission led by former German Defense Minister Ursula von der Leyen and the German Constitutional Court has served its purpose. As you know, Brussels came forward with an initiative to buy up government bonds of EU member states in order to ensure their financial assistance during the pandemic crisis, but the German judges in Karlsruhe considered this project insufficiently justified and running counter to the German Constitution. At that, they refused to abide by decisions of the European Court of Justice in Luxembourg, creating a precedent fraught with the collapse of the entire commonwealth.

In short, the breakdown of confidence in Brussels with a goodly proportion of Germans is quite explicable by the awakened national pride and reluctance to the idea of once again sharing money from their budget, for instance, with Spain or Italy. However, that's a far cry from saying that the head of the German government upholds the same view. Reuters reported Angela Merkel's conviction that during the pandemic crisis, Germany should still help the economies of weaker EU members get back on their feet. According to participants in the CDU/CSU parliamentary faction meeting, the Chancellor said that being an export-oriented nation, Germany is interested in making its EU partners feel good. She pointed out that Germany will have to send much more money to the EU than before, since no one is interested in leaving Germany alone strong after the crisis.

By the way, during the same CDU/CSU faction meeting, its budget expert Eckhardt Rehberg reminded the audience that Germany itself is desperate for money. Thus, it will only manage to reach the tax collection rate as of late 2019 approximately in 2023, and the Federal budget's tax loss this year will amount to some 45-50 billion euros. At the same time, Germany is well aware of the figures from the Brussels-published recent market forecast: in general, the EU GDP fall over the COVID-19 pandemic will be 7.4% this year (a 6.5% drawback in Germany).

Greece, Italy and Spain will be particularly affected in 2020. According to EU Commissioner for Economy Paolo Gentiloni, this is the "worst recession" in the Union's history. Angela Merkel seems to fully share this opinion. For this reason, the German Chancellor has now proposed a plan to save the EU economy by forming a 500-billion-euro fund along with French President Emmanuel Macron. Moreover, they launched this initiative amid their high popularity among the fellow citizens.

More likely, this situation should help both leaders achieve the implementation of this plan, winning support both of their countries' population and governments of all the EU member states without exception. After all, this entails financing the fund through the EU budget by borrowing against state security. Germany and France believe that in this case, the EU will be able to get loans in the capital market at a lower interest rate than if the countries borrowed separately. The EU is estimated to use this fund for providing financial assistance to needy members of the community, individual regions and industries.

But there is still an issue that splits Europe: Merkel and Macron suggest allocating aid from such a fund as free of charge, which is readily supported by head of the European Commission Ursula von der Leyen, as well as southern European countries like Italy, Greece and Spain. Austria and the Netherlands, in turn, believe that since such financial injections are loan-based, they should be carried out at a certain percentage, i.e. as loans. For the eastern European countries – Poland, Hungary, Slovakia and the Czech Republic – it is crucial that the new fund does not affect the planned expenditures of the EU budget for subsidies on structural projects in these countries.

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