Could the economic "tsunami" triggered by the coronavirus outbreak in Europe finally crack one of the biggest EU taboos: European nations borrowing as one on financial markets?

While it is certainly early days, the idea that risk-averse Germany could join Italy in raising funds is getting slowly nearer, even if its not the big bang dreamed of by big borrowers France or Spain.

The effects of the outbreak are likely to devastate European business, as one country after another locks down to fight the pandemic, bringing some of the world's biggest economies to a standstill.

To avert a financial crisis, Italy, France and some key EU officials are lobbying for something already dubbed a "coronabond", where hard-hit countries could borrow without singling themselves out as broke.

The gambit was championed by Italian Prime Minister Conte - with the backing of French President Emmanuel Macron - in an EU videoconference on Tuesday, though the details remain thin.

According to diplomats, Conte told EU leaders "not to delude themselves that there might be a member country that could remain unscathed from this economic and social tsunami".  

And, he added, any "delay in a common response would be lethal for everyone and therefore it would be irresponsible."

The idea is to not repeat mistakes of the eurozone debt crisis, when the economies of Greece and Ireland were left by the roadside by eurozone partners when the financial markets turned on them. 

The countries were then bailed out massively once the damage was done.

But the idea of mutualised debt is political poison in Germany, the powerhouse that dominates the eurozone single currency bloc's economy.

Northern Europeans have a deep distrust of binding their fate to big debtors such as Greece or Italy, and the thought of a so-called "eurobond" has been a non-starter for decades.

But, crucially, German Chancellor Angela Merkel on Tuesday broke with custom and did not dismiss the prospect of a corona crisis bond out of hand.

The EU executive "has made proposals for this... These are initial discussions," Merkel said, when asked about it by reporters

She hinted at the involvement of the European Investment Bank, the Luxembourg-based institution that funnels loans to strategic European businesses. 

And intervention could also be backed by the eurozone's €410-billion crisis-fighting fund, the European Stability Mechanism. 

Merkel said finance ministers, who will meet by videoconference on Friday, were in charge of the issue.

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