By Todd Buell

Law360 (April 2, 2020, 1:13 PM EDT) -- France's finance minister said Thursday that he wanted a common European Union fund to issue bonds to finance the economic recovery from the coronavirus crisis, and that the program could be supported by an EU-wide solidarity tax.

The fund, which is likely to be discussed at a meeting next Tuesday of a group of EU finance ministers known as the Eurogroup, would help the bloc recover from an expected violent economic downturn due to the vast restrictions on businesses and public life that governments have implemented to stop the spread of the coronavirus that causes the disease COVID-19.

Speaking at a webcast press conference in Paris, Finance Minister Bruno Le Maire said that the EU needed to establish an "exceptional and temporary joint fund dedicated to helping all EU countries kick-start" their recoveries. The fund would issue bonds with the joint guarantee of EU member states, and countries' use of the fund would be based on the economic damage suffered due to the outbreak of the virus.

"Common bonds issued by the fund could be reimbursed in the long term through a new and exceptional resource such as a solidarity tax or a contribution of member states," he said.

His spokeswoman didn't have an immediate response to a request for comment seeking details on the proposed solidarity tax.

Germany has had a solidarity tax for about 30 years to help finance the rebuilding of the former East Germany, though the country has partially eliminated it. Amid debate about a joint European financial package to help fight the coronavirus crisis, some commentators had hoped that a European response could spare countries the need to take austerity measures, such as raising value-added tax, which were common during the EU's debt crisis in the early 2010s.

Le Maire said that the joint fund would be on top of other European means of funding economies, such as the European Stability Mechanism bailout fund; the European Investment Bank, an EU-owned bank that finances projects in line with the EU's political goals; and an unemployment reinsurance program recently proposed by European Commission President Ursula von der Leyen.

Facing the health and economic crises due to the coronavirus, EU leaders have still struggled to overcome years of animosity between northern and southern countries that goes back at least to the eurozone debt crisis one decade ago, in which southern countries were forced to accept recessionary fiscal consolidation in exchange for bailout money.

Le Maire said this was the moment in which Europe needed to bury old grievances and come together.

"Let's avoid any ideological debate on Eurobonds or corona bonds," he said. "There is one single political question: Shall we stand together or not? Shall we stand together, as a unified continent, to face the long term and dramatic consequences of the economic crisis, or shall we give to the world the sad image of a continent divided between the north and the south?"

Le Maire said that he was working closely with his German counterpart, Olaf Scholz. Germany and the Netherlands have generally been two of the more prominent countries against sharing of debt in the EU.

The German Finance Ministry said in a statement to Law360: "The finance ministers of the Eurogroup have been commissioned by EU heads of state to develop measures to deal with the COVID-19 crisis. These talks are ongoing. As soon as results are available, we will take [a] position." 

The Dutch didn't comment, but the Netherlands has proposed a €20 billion ($22 billion) recovery program over three years. 

Le Maire said it was imperative that all EU countries back the fund: "We need everybody on board. Solidarity is not solidarity if you have one or many member states outside this solidarity." He said that while he sensed that all countries supported solidarity in principle, "it's time to go from the words to the decisions."

--Editing by Robert Rudinger.

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