Macron is cautious about joint EU debt plan

VERSAILLES, France (Reuters) – French President Emmanuel Macron said on Thursday the war in Ukraine will require joint EU investments which may lead to a new bout of joint debt, but added he would prefer to talk about the goals first rather than what is needed to get there.

Some countries such as France and Italy want new jointly-issued EU debt to help cushion the shift from Russian energy imports, the impact of sanctions imposed on Moscow and the push for more independence from global food and microchip suppliers. But Germany, the Netherlands and others strongly oppose such a move, saying there is plenty of still unused money in the EU’s 800 billion euro pandemic recovery fund that the bloc is already jointly borrowing.

Asked whether EU leaders would launch a second EU recovery fund, Macron said he’d rather talk about the goals first rather than the tools to reach them. “That’s always been my way of doing things. It helps lift taboos and blockages,” he told reporters ahead of an EU summit at the Palace of Versailles near Paris. Macron had to win over former German Chancellor Angela Merkel and the so-called “Frugals” group of fiscally conservative EU countries in 2020 to launch the first EU recovery fund and its unprecedented joint debt package.

“We will need a strategy for joint European investments. We’ve started that with the recovery plan of the summer of 2020. It’s still useable in parts, by the way,” Macron added. “But depending on the goals we set ourselves, we’ll need to decide whether to transform it, take new decisions. I don’t want to preempt it,” he said.

However, Macron said EU leaders faced a historic moment that will call for historic decisions. “Europe has changed in the face of the pandemic. It is going to change even more and faster in the face of war,” he said.

Macron also said leaders will be giving the European Commission a mandate to draw up means to protect households from rising prices, adding that several technical proposals were in the works and could be finalised by the end of the month.