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THE EURO ZONE

Grant application

This week, Spain's economy minister Nadia Calviño highlighted something that the EU has always struggled with when handing out aid packages, providing loans or setting fiscal targets for its member states. "It cannot be that some countries are able to support their economies in a more generous manner than others," she said in an interview with the UK's Financial Times.

Calviño's statement raises the question of how the EU should deal with economic inequality among its members, especially in times of crisis. As Spain sees it, Brussels' challenge is to ensure that each country has the amount of financial support it needs to combat the effects of the Covid-19 pandemic, taking into account the fact that members such as Germany and France have more of their own resources than Spain and Italy (the deeper question, of course, is whether an institution with such overarching responsibilities and powers is either practical or desirable in the first place).

Spain's latest proposal, which was due to be discussed at an EU video summit held on Thursday, is that Brussels issue debt-financed grants, rather than loans, to help its members deal with the economic effects of C19, which some experts predict could be up to €1.5 trillion across the bloc as a whole. These would augment the €500-million aid package already agreed upon by eurozone finance ministers.

The grant idea is likely to reignite a classic EU argument, with wealthier countries resisting the call to shoulder poorer members' debts, thus inviting the charge of lack of solidarity. This frequently rehearsed debate reveals one of Brussels' most complex and divisive tasks - namely, adjusting its fiscal packages and goals to suit countries with often wildly differing economies and priorities. Keeping everyone happy, in other words.

Meanwhile, the Spanish government is being criticised at home for the increasingly opaque and improvisatory nature of its response to Covid-19. Speaking in congress on Wednesday, the leader of the Basque National Party described Pedro Sánchez's approach as "based on imprecise, contradictory and unconsulted announcements".

Sánchez's government is going to be slammed by vote-seeking opponents whatever it does, but this was a justified accusation: the continually extended quarantine measures seem to be unsupported by logic or a medium-term plan, as was demonstrated this week by the rapid U-turn over children's freedom of movement.

In the Financial Times interview, Calviño also said that the government is likely to give up on trying to pass a budget for 2020. Rather than direct some of its attention to a key domestic problem, then, Spain's minority administration is focused on convincing the EU to finance a coordinated, levelling response to the pandemic - one that adequately addresses its poorer members' requirements without pushing them further into debt. It's hard to say who has the more difficult task, Madrid or Brussels.