German Chancellor Friedrich Merz said on Thursday that joint debt was not an option to finance the European economy, speaking at a ceremony awarding former European Central Bank President Mario Draghi the Charlemagne Prize.
In his speech at Aachen Cathedral, Merz echoed Draghi’s call to boost European competitiveness, but differences remain over how to finance it.
"Some now believe we can evade this painful task by taking on new debt, European debt, by financing regular spending through debt. Germany cannot follow this path for constitutional reasons alone, and, ladies and gentlemen, we also need resources for future crises," Merz said on Thursday.
The German Chancellor had already expressed his opposition to joint borrowing, a proposal to finance the bloc’s economy that was revived by Draghi in his 2024 report on European competitiveness.
In his report, Draghi has called for joint EU borrowing as a necessary tool to mobilise an additional €800 billion in annual investment if the bloc is to remain globally competitive. Part of the financing would come from private funds, but public investment would also be needed.
