While a group of southern countries advocates expanding shared debt to boost competitiveness, a group of northern, so-called frugal countries is firmly opposed and demands stricter rules and fiscal discipline.
Two MEPs from opposing camps clashed in a direct debate.
The Debate Between Opposing Camps
Markus Ferber, a German conservative, stated that additional borrowing would put further strain on public finances and would not address the root causes of weak growth, calling instead for reforms in budget spending.
Pasquale Tridico, an Italian MEP from the Five Star Movement, called public debt “one of the most important tools for economic growth” and advocated for its broader use.
“We need to adopt shared debt. This is not only a matter of solidarity, but also of a well-structured economy,” Euronews quoted Tridico as saying.
Ferber, for his part, noted that since the EU intends to defer repayment of the joint debt incurred during the COVID era—known as the NextGenerationEU fund—the markets “will not have confidence” in new borrowing.
“I wish you the best of luck when you go to the market to ask for money,” he said. “But when it comes to refinancing or repayment—I’m sorry to say—the market will demand high interest rates.”
Fierce Global Competition
Both MEPs spoke out about the fierce global competition Europe faces and its devastating impact on the Union’s industry and economy.
China’s industrial overcapacity, fueled by massive state subsidies, is flooding the EU market with cheap exports and posing an existential threat to manufacturing.
The European Commission is preparing a strong response but has set an October deadline to achieve “tangible” results in negotiations with Beijing.
“We are not doing enough (regarding China) because we are not using the only asset we have, namely the single market,” said Ferber.
According to him, the barriers within the EU’s single market itself are so significant that their economic impact is comparable to imposing 45 percent tariffs on intra-block trade.
