This Holy Week it has been told in many media (especially television) that Europe mobilizes half a billion in aid for Spain to overcome the impact of the coronavirus. Nothing is further from reality: they are not half a billion, they are not aid, nor are they all for Spain. They are loans and only intended for health spending. Our Government has suffered a resounding defeat beyond that the coronabonos (which were discarded weeks ago) are not accepted. Their only victory is that they do not demand deficit reduction in exchange for this rescue.
The government aspirations in the negotiation With the other EU countries within the Eurogroup, they were, in this order: 1) the mutualisation of the debt that will have to be incurred through the issuance of joint bonds (the Eurobonds or coronabonds) whose amount would be distributed among the States; 2) the same mutualization through the creation of an intermediate vehicle, a joint fund, that would issue those bonds; 3) the granting of subsidies to face the enormous expenses in aid, subsidies, guarantees and moratoriums; and 4) the granting of loans for said purpose.
Well, the minister Nadia Calviño he hasn't gotten any of the four, no matter how much he says that it's a good deal. The coronabonos were discarded weeks ago although Pedro Sánchez continue to insist for consumption from your parish. But it is that he has not even managed to grant us a loan to cover the famous "social shield" of Pablo Iglesias. The 240,000 million mobilized – they are not 500,000 and they are to be distributed among the 27, not only for Spain – they are a "loan on advantageous conditions", as he described Sour cherries to the 2012 financial rescue, which can only be used for healthcare expenses. And they come out of the same instrument, the ESM (European Stability Mechanism).
AND THEY COULD HAVE SET TERMS FOR THE LOANS
It is true that it is not the only program. The Commission has also approved the SURE program against unemployment, which is also a loan that must be repaid but this time it can be used to cover measures such as the Spanish ERTE. In addition, it is only endowed with 100,000 million to distribute among all; and we are going to spend only that on the guarantees of the ICO credits. Third, there are credits from the European Investment Bank, which are loans for SMEs that will be channeled through banks.
The only medal that our Executive can wear is that, on top of not giving us anything we asked for, they have not put conditions in exchange for these loans as they did in 2012 (remember the 'men in black'). Conditions that consisted of meet the public deficit targets at once -We have been in breach for 10 years- and that the Netherlands demanded, but that it withdrew due to pressure from Germany (not from Spain), which considers that flexibility is needed in a crisis like the current one.
HOLLAND AND GERMANY ARE THE BAD?
Then there is the value question, where do the furious attacks of the left on the countries of the North by unsupportive with us in this hour of need. In these countries (with a Calvinist tradition) the topic of manirrots and wasteful in the countries of the South (with a Catholic or Orthodox tradition) weighs heavily, and the memory of the rescue of Greece, Ireland, Portugal and Spain in the crisis is also very fresh. of the euro. For those governments, giving us non-refundable aid would be electoral suicide because their citizens are radically opposed to "paying us for the party."
It can be argued that now it is not a party, but a health crisis never seen before. The answer to this argument came from Finland: each country has to be responsible for the expenses incurred by the epidemic. For that you should have emergency mattresses, and if you don't have them, it's because money has been spent on unnecessary things. Still, and since people are dying, they have agreed to help us, but strictly for that, to save lives. Hence, the MEDE loan can only be used for health expenses.
Nor are the criticisms that say that Europe has left us abandoned and that, for the rest of the expenses, we will have to do it ourselves. Because almost all analyzes forget about ECB, which is the most important actor and the only European body to which States have truly transferred sovereignty. Christine Lagarde has launched a public debt purchase program of up to 750,000 million, which, in practice, involves monetizing the debt of the States, including Spain.
That's what explains that, unlike 2012, our risk premium is no longer around 500 or 600 basis points. The question is whether, to pay for all the measures that the government has announced, the increase in public debt is going to be too great even for the ECB. So we are going to have a serious problem.