Nine EU leaders urge joint borrowing in Europe

BRUSSELS: Nine EU countries, including France and Spain, on Wednesday called for eurozone countries to jointly issue debt in order to fight the devastating impact of the coronavirus outbreak.

The idea of mutualised debt is a frequent request of heavily indebted EU nations and is championed by the European Central Bank, but it is seen as political poison in Germany and other rich northern members.

"In particular, we need to work on a common debt instrument... to raise funds on the market on the same basis and to the benefits of all member states," said the letter, which was also signed by the leaders of Italy, Greece, Ireland, Belgium, Luxembourg, Slovenia and Portugal.

France, Spain and Italy have long called for a some kind of eurobond, that is in effect joint borrowing by the 19 members of the euro single currency. They say it could serve as the bedrock of a safer and more unified European economy and would become a globally respected asset on par with the US Treasury bills that help make the dollar the world's reference currency.

The leaders' request came after France backed Italy's demand for something called a "corona bond", an idea that Germany and the Netherlands have said is not necessary and have rejected.