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Finland opposes joint EU debt to fight coronavirus pandemic

Published : 08 Apr 2020, 20:36

  DF News Desk

Finance Minister Katri Kulmuni. File Photo Finnish government by Kosti Keistinen.

Finland argues against joint debt instruments in the eurozone, even though some member states want to issue the so-called "coronabonds" to rescue the economy as it slips into a recession caused by the COVID-19 pandemic, reported news agency Xinhua quoting national broadcaster Yle on Wednesday.

After attending a eurozone finance ministers' video conference which started on Tuesday, Finance Minister Katri Kulmuni told media on Wednesday morning that Finland does not support joint debt.

"We don't support joint debt, I can say that much," declared Kulmun, adding that every country should take responsibility for its own economic policy.

According to Yle, the Grand Committee of the Finnish Parliament sets parameters for Finnish leaders in EU matters, and it has consistently opposed joint debt instruments.

At the Grand Committee's recent meeting held earlier this week, MPs held the same position that has been maintained for the last 10 years.

After 16 hours of discussion, the finance ministers' meeting suspended on Wednesday morning without reaching consensus. At the meeting, the key issue was a package of measures worth around 500 billion euros to fight the recession caused by the COVID-19 pandemic.

Eurogroup Chairman Mario Centeno said the meeting will continue on Thursday.

The Eurogroup is an informal body where the ministers of the 19 euro area member states discuss matters relating to their shared responsibilities related to the euro.

Issuing joint debt has been a battle line between EU southern countries like Spain and Italy and the northern ones, such as Germany, Austria, the Netherlands and Finland, reported Yle.

The Finnish government has concluded at a press conference on Wednesday that Finnish economy will shrink by 5.5 percent this year as both international and domestic demand will decline.

The figures are based on the assumption that the current restrictive measures would not exceed three months in length. On Tuesday, however, the Bank of Finland warned of an even 13 percent decline in the economy, if the crisis continues into the autumn.