Lithuanian president rules out coronabonds

  • 2020-04-06
  • BNS/TBT Staff

VILNIUS – Lithuanian President Gitanas Nauseda opposes the idea of the euro area countries jointly issuing debt – the so-called coronabonds – during the coronavirus crisis.

“I am actually more inclined to be skeptical about this instrument and in favor of looking for other possibilities to help the countries in distress,” he said at a news conference on Monday, when asked by a BNS reporter about his view on the new type of debt instrument.

The push for mutualized euro area debt is led by Southern European countries, such as Italy, Spain and France, which claim that such an instrument of solidarity would help speed up the recovery of the industry.

However, the Northern countries, such as the Netherlands and Germany, oppose the issuing of joint bonds as it would mean their own taxpayers would have pay for the countries, which, as they say, have long lived beyond their means.

Until now, Nauseda, who represents Lithuania at the negotiations of the European leaders, has never stated his strong stance on the issue. Meanwhile, public comments made by president’s economic adviser and the finance minister have not been uniform.

Lithuania’s president also said that the countries should now focus on other instruments, such as the European Stability Mechanism, improve access to borrowing for individual countries and be more flexible in the provision of state aid to businesses.

Speaking about his disapproval of coronabonds, Nauseda mentioned the mistakes of the past without going into detail.

“If we fully open this gate without any prior terms and conditions, you know, the opening of such gates in the past had rather sad outcomes and we should learn from those mistakes of the past and do everything in a prudent and rational way,” he added.