The head of the European Investment Bank (EIB), Werner Hoyer, has called on the EU to make greater efforts to counter a long-lasting economic crash as a result of the corona crisis. “I think that’s the biggest economic challenge since the Great Depression, if you put wars aside,” Hoyer told SPIEGEL. “Even if people behave sensibly and we can finally get the virus under control, the slump in economic performance in Europe and around the world will be enormous. This is not about a few percentage points.”
The corona crisis poses unknown challenges for the EU, said Hoyer. “In the next few months, the European project itself will be put to the test. And if we don’t take sufficient care of it, we will suffer enormous economic and political damage. Europe is threatened by this crisis to fall behind in global competition.”
Pressure on the EU Commission
The bank headed by Hoyer is one of the most important donors in the European Union, with a balance sheet total of almost 600 billion euros, it is larger than the German development bank KfW. Whether regional aid, large infrastructure projects or the “Juncker Plan” named after the former EU Commission chief for more investment – the EIB’s 3,300 employees provide the money for many projects to which the EU’s star flag is attached.
Accordingly, Hoyer was able to present a plan last weekend that its bank would initially like to activate up to EUR 40 billion in order to quickly help companies in the crisis. “However, of the 40 billion we believe we can move, only 28 are safe so far,” said Hoyer. The rest are still under discussion. “I’m pushing the pace at every turn and, frankly, I’m not going fast enough.”
In particular, Hoyer has its sights set on the EU Commission, which has a say in the allocation of funds from the Juncker Fund (European Fund for Strategic Investments). “In the so-called Juncker fund there are 1.5 billion euros from which we could make 12 billion euros in liquidity aid for companies. That would be a house number,” said the bank manager. “I strongly recommend the EU Commission to mobilize this money now.” He can understand that the work of budget commissioner Johannes Hahn in this situation is “extremely difficult”, said Hoyer. “But the crisis has its own priorities.”
“We are in a whatever-it-takes situation”
Hoyer expressly expressed support for the European Central Bank (ECB). The central bank plans to use the Pandemic Emergency Purchase Program (PEPP) to buy additional bonds worth 750 billion euros by the end of the year. “There is likely to be a fundamental discussion about the role of monetary policy again immediately, but I don’t want to be involved,” said Hoyer. “I think it is right that the ECB takes responsibility.”
The bank is helping to calm the markets, similar to Christine Lagardes predecessor Mario Draghi, who said in mid-2012 that his bank would “do everything necessary to preserve the euro” – thereby calming the markets. “We are in a whatever-it-takes situation and it is good that more and more players are understanding this,” said Hoyer. “In the financial crisis, the Chancellor stood up and said: The savings are safe. Such statements help calm markets and citizens.”
Hoyer is correspondingly open about the corona bond issue: “It will not help us if we now revitalize the old debate about the pros and cons of common European debt instruments,” said Hoyer. “We probably have the most experience issuing themed bonds, so I’m looking at corona bonds with interest.” The EIB could well imagine launching such bonds in cooperation with the ECB and the ESM euro rescue fund.
Commissioner Ursula von der Leyen had also recently commented positively on the idea of corona bonds: “Excluding something like this from the beginning is not wise in this unprecedented crisis,” she told SPIEGEL.
“The Germans would be particularly affected”
It is now crucial for the bank boss to avert damage from the EU internal market. He did not want to criticize the national governments if they considered border closures necessary for health policy reasons, said Hoyer. However, that was a different matter with regard to the effects on the internal market. “If, because of the inability of the Europeans to really act together, the internal market is also up for grabs, the Germans would be particularly badly affected.”
He was not only worried that traffic would be hampered by the border closures. “What is worse is that some markets are no longer defined Europe-wide, but nationally. That goes against the bottom line: If my neighbor is bad, then I will soon be bad – and that is why we need a common answer.”
The FDP politician, who was formerly Minister of State in the Federal Foreign Office, criticized the temporary export ban for medical protective equipment and breathing masks, which the German government had also decided on and which has now been lifted under pressure from the EU. “If I were still active in politics, I would now find clear words. We have the task of protecting our own population, of course, but that should not mean that we can no longer help others.”
Hoyer emphasized that there must be a reconstruction program after the crisis. “We’re talking about a challenge for probably a decade,” said the bank manager. In addition, challenges like climate protection should not simply be ignored now. “The corona crisis should not be a reason to forget the climate targets.”