Reform MP: Government needs to try again on coronavirus bonds ({{contentCtrl.commentsTotal}})

Reform MP Aivar Sõerd.
Reform MP Aivar Sõerd. Source: ERR

The Estonian government needs a different mandate from the European Council for its so-called corona bonds, one which the Riigikogu's European Union Affairs Committee has so far give, Reform MP Aivar Sõerd says.

"The thing is this – the [Riigikogu] committee has given a clear mandate to the government not to support common Eurozone bonds. However, Prime Minister [Jüri] Ratas is known to be requiring a different mandate from the European Council on June 19, in order to support the bonds," Sõerd wrote on his social media account Monday.

Sõerd said that convincing reasoning for the issuing of such bonds was as yet lacking.

"When reversing the mandate, I would like to hear and see compelling argumentation. The main new argument is a generally foggy story based on some sort of supreme solidarity," he said.

Sõerd said that the committee's position is that common euro area bonds, or so-called corona bonds, are not directly necessary to mitigate the immediate effects of the crisis, since Eurozone central banks' asset purchases on government bond markets will allow new government bonds to be issued on favorable terms.

The committee also says the issuance of instruments requires very fundamental political agreements, as well as technical preparations, which makes them unsuitable in mitigating the immediate effects of the crisis. 

The issuing of bonds along these lines would be better facilitated by fuller fiscal union, the committee said in a statement.

"The idea of ​​common bonds can be revisited if there is a political will to change the EU treaties and develop economic and monetary union into a political fiscal union."

Sõerd told ERR that it is likely that committee will form its new position no later than June 15, when it will discuss further Estonia's positions on the European Council.

the government is planning on issuing €1 billion in bonds, with a maturity of ten years to be listed on the Irish Stock Exchange (ISE). Some experts say these will be popular.

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Editor: Andrew Whyte

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