German finance minister sees 'no way back' from EU joint debt

BERLIN, Aug 24 (AN): German Finance Minister Olaf Scholz said Sunday that the European Union's (EU) recovery package financed by joint borrowing was a long-term measure rather than a short-term coronavirus crisis fix, contradicting Chancellor Angela Merkel.

"The Recovery Fund is a real step forward for Germany and for Europe, one we won't go back on," Scholz, who is also the center-left Social Democratic Party (SPD) candidate to succeed Merkel in 2021 elections, told the Funke newspaper group.

Steps taken under the plan, including EU nations agreeing to jointly issue debt "represent fundamental changes, perhaps the biggest changes since the introduction of the euro" single currency around the turn of the millennium, Scholz said.

"These steps forward will inevitably lead to a debate about joint resources for the EU, something that's a condition for an improved European Union that works better," he added.

Long and intense debates were needed before the 27 EU countries reached agreement in July on their historic €750-billion ($885 billon) recovery scheme, more than half of which will be paid out as direct grants.

For the first time, leaders gave their green light to joint debt - an idea Germany had long rejected until the COVID-19 pandemic hobbled many European economies that had already spent a decade struggling to recover from the last financial crisis.

Scholz added that the way voting works at EU level should be reformed to make reaching decisions easier.