Italy hands EU ultimatum: Conte warns EU will collapse if debt demands not accepted today

The Italian prime minister has threatened to veto any conclusions reached by his colleagues in the row over the so-called “coronabonds”. Rome has stood resolute in its demand for a pan-European debt mechanism that would see the cost of the worst-affected countries’ recovery from the global pandemic shared with their neighbours. European leaders will come together for a virtual summit later today to decide on the first stages of the rescue package.

“I don’t believe the upcoming meeting of the 27 leaders will find a definitive solution but I will do everything … to ensure it expresses a clear political path in the only reasonable direction,” Mr Conte said. 

The Italian prime minister told the BBC on April 9: “If we do not seize the opportunity to put new life into the European project, the risk of failure is real.”

He warned: “If our response isn’t strong and unified, if Europe fails to come up with a monetary and financial policy adequate for the biggest challenge since the Second World War, for sure not only Italians but European citizens will be deeply disappointed.”

The high-level meeting is expected to expose deep divisions within the bloc at a crucial moment in its history.

The defining battle pits Germany’s Angela Merkel and France’s Emmanuel Macron against one another as the influential leaders take opposing sides.

Paris alongside southern and Mediterranean countries – including Italy and Spain – have thrown their weight behind the concept of a rescue effort built up mutualised debt.

However, more frugal member states – Germany, Austria, Denmark, Sweden and the Netherlands – have all voiced unwillingness to underwrite the debt for their neighbours’ rebuilds.

Ursula von der Leyen, the European Commission’s president, has pushed for the EU’s next seven-year budget to be used as the basis for the bloc’s recovery.

She is preparing a €2 trillion plan that uses the existing multi-annual financial framework and new mechanisms.

But there is little faith that the German’s ambitious plans will come to fruition in the coming weeks.

EU officials have conceded the talks could last until June or July because of conflicts between member states.

One senior source said: “Things are moving but so far choices have not been made.

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“There is a bit of distrust because there are some countries that fear they will have to pay the debt of other countries.”

The debate are likely to reopen wounds after a recent scrap over the budget ended in a failed summit in February, before the coronavirus outbreak engulfed the continent.

However, EU leaders are expected to green-light a €500 billion Eurozone rescue package that was agreed by finance ministers last week.

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The measures, which are expected to be running from June, were opposed by Italy.

Despite the opposition, Mr Conte said he would not veto the fund because colleagues in Spain have suggested they could be interested in accessing the help.

Rome has said it sees little use in using the tool domestically to fund its own recovery.

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