Key facts
- EU lawmakers Markus Ferber and Pasquale Tridico debated the use of common debt for economic growth.
- A Spanish proposal suggests Brussels borrow up to €850 billion annually for growth funding.
- Southern EU nations support increased joint borrowing, while northern nations oppose it.
- Ferber argued for spending reforms over increased borrowing, citing market trust concerns.
- Tridico advocated for expanding the use of public debt as an economic growth tool.
- The debate also touched upon the threat of Chinese industrial overcapacity to EU manufacturing.
In a debate on Euronews' 'The Ring,' European Union lawmakers Markus Ferber and Pasquale Tridico clashed over the efficacy of common debt in addressing Europe's economic stagnation and declining competitiveness.
A Spanish proposal to have Brussels borrow as much as €850 billion annually to fund growth has reignited a long-standing debate within the EU, dividing member states.
Southern countries, including France, are pushing for more joint borrowing to bolster competitiveness. Conversely, a bloc of northern, fiscally conservative nations vehemently opposes this, advocating for stricter fiscal rules and discipline.
Ferber, a German Conservative MEP, argued that increased borrowing would strain public finances and fail to tackle the root causes of slow growth, instead calling for spending reforms. He expressed skepticism about market trust for further joint borrowing, especially given delays in repaying existing Covid-era debt like Next Generation funds, predicting high interest rates for refinancing.
Tridico, an Italian MEP from the Five Star Movement, countered that public debt is a crucial tool for economic growth and its use should be expanded. "We need to accept common debt. It is not a matter only of solidarity, it is a matter of a well-built economy," Tridico stated.
Both MEPs also addressed the intense global competition Europe faces, particularly from China's industrial overcapacity fueled by state subsidies, which they believe poses an existential threat to EU manufacturing. Ferber suggested the EU should leverage its Single Market more effectively to counter this, noting that internal barriers have an economic impact equivalent to 45% tariffs.