Coronabonds and Cancellation of Nazi-Era War Debts Fuel Debate Around $540B EU Pandemic Relief Deal

A deal struck late Thursday will unlock $543 billion (500 billion euros) in EU support for countries hit hardest by the novel coronavirus pandemic, revealing through the bloc's fiscal response deep fissures between north and south members facing a financial crises.

Finance ministers from across the bloc struck the deal during a video conference call as Germany, Austria, and the Netherlands demanded heightened scrutiny of struggling member states who might benefit from credit lines under the European Stability Mechanism (ESM), the agency in charge of financial assistance to eurozone countries.

The deal pitted Germany against Italy, rich versus poor, and raises the specter of how or whether an economic zone could share the financial risk.

Earlier this month, Carlo Calenda, a former minister and Italian permanent representative to the EU, took out a full-page advertisement in the German daily Frankfurter Allgemeine Zeitung, attacking the Dutch backing of German resistance to coronabonds.

The advertisement said the reluctance recalled the cancellation of European Nazi war debts, from which Italy also benefited after the Second World War.

"Germany could never have paid it," read the advertisement, signed by Calenda. "Your place is with the Europe of institutions, of values of freedom and solidarity. Not following small national egoisms."

Italy's Finance Minister
Italian Minister of Economy and Finance Roberto Gualtieri. Antonio Masiello/Getty Images

At the heart of the negations were coronabonds, a relief measure championed by Italy and Spain which would have granted access to cheaper lines of credit. The credit line, which would involve bloc countries borrowing at shared rates from markets used by the 19 member states, was opposed by the Dutch government, Germany, Finland, and Austria.

The opposition hinged on the joint liability of the created debt, making borrowing more expensive for wealthier nations like Germany, which currently borrows at a negative rate.

"We have put on the table of the European Council a recovery fund enabling common debt issuance," Roberto Gualtieri, Italy's economy and finance minister, told reporters. "Off the table is any conditionality on the use of European Stability Mechanism financing. Now it's up to the leaders to take the right decisions."

The deal came a day after Italy's prime minister, Giuseppe Conte, whose country has seen more than 18,000 deaths attributed to the new coronavirus and has since March been the epicenter of the European pandemic, warned that relations within the bloc risked collapse.

"It's a big challenge to the existence of Europe," he told the BBC. "If Europe fails to come up with a monetary and financial policy adequate for the biggest challenge since world war two, not only Italians but European citizens will be deeply disappointed."

Italy and Spain accepted a delay on the coronabond recovery fund agreement, which will be put to member heads of state at a future summit.

Centers for Disease Control and Prevention Advice on Using Face Coverings to Slow Spread of COVID-19

  • CDC recommends wearing a cloth face covering in public where social distancing measures are difficult to maintain.
  • A simple cloth face covering can help slow the spread of the virus by those infected and by those who do not exhibit symptoms.
  • Cloth face coverings can be fashioned from household items. Guides are offered by the CDC. (
  • Cloth face coverings should be washed regularly. A washing machine will suffice.
  • Practice safe removal of face coverings by not touching eyes, nose, and mouth, and wash hands immediately after removing the covering.

World Health Organization advice for avoiding spread of coronavirus disease (COVID-19)

Hygiene advice

  • Clean hands frequently with soap and water, or alcohol-based hand rub.
  • Wash hands after coughing or sneezing; when caring for the sick; before, during and after food preparation; before eating; after using the toilet; when hands are visibly dirty; and after handling animals or waste.
  • Maintain at least 1 meter (3 feet) distance from anyone who is coughing or sneezing.
  • Avoid touching your hands, nose and mouth. Do not spit in public.
  • Cover your mouth and nose with a tissue or bent elbow when coughing or sneezing. Discard the tissue immediately and clean your hands.

Medical advice

  • Avoid close contact with others if you have any symptoms.
  • Stay at home if you feel unwell, even with mild symptoms such as headache and runny nose, to avoid potential spread of the disease to medical facilities and other people.
  • If you develop serious symptoms (fever, cough, difficulty breathing) seek medical care early and contact local health authorities in advance.
  • Note any recent contact with others and travel details to provide to authorities who can trace and prevent spread of the disease.
  • Stay up to date on COVID-19 developments issued by health authorities and follow their guidance.

Mask and glove usage

  • Healthy individuals only need to wear a mask if taking care of a sick person.
  • Wear a mask if you are coughing or sneezing.
  • Masks are effective when used in combination with frequent hand cleaning.
  • Do not touch the mask while wearing it. Clean hands if you touch the mask.
  • Learn how to properly put on, remove and dispose of masks. Clean hands after disposing of the mask.
  • Do not reuse single-use masks.
  • Regularly washing bare hands is more effective against catching COVID-19 than wearing rubber gloves.
  • The COVID-19 virus can still be picked up on rubber gloves and transmitted by touching your face.

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