Brussels wants the power to tap international markets to raise €100bn in loans to help Italy, Spain and other countries worst affected by coronavirus, as the EU seeks to counter criticism that it has run out of tools to fight the pandemic. 

According to a draft proposal seen by the Financial Times, the European Commission will on Thursday approve an instrument known as “SURE” that will provide back-to-back loans to economies that face a “sudden and severe” rise in spending on short-time working schemes, such as those modelled on Germany’s Kurzarbeit system. 

By opting to raise money on the open markets, the commission hopes to defuse tensions among member states about the need for so-called coronabonds — joint debt instruments that have the backing of nine eurozone countries, including France, Italy and Spain, but which are fiercely opposed by Germany and the Netherlands. It will instead ask governments to provide guarantees to back loans issued by Brussels.