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No to Corona bonds

Shot down by the usual suspects.

FRANKFURT -- Europe's currency union is passing up what could be its last chance to address its fatal flaw.

Eurozone finance ministers on Tuesday batted away suggestions that the coronavirus pandemic could be the catalyst for joint debt instruments, which would be the definitive statement that its members will stand by each other financially whatever happens.

Instead, the Eurogroup ministers made clear that whatever national governments have to spend to beat the virus, it will ultimately be for them to pay back.

[...]
the difference in borrowing costs will persist as long as a shared debt instrument -- along with other elements of a fiscal union to accompany the euro -- are off the table.

Nine EU prime ministers, including those of Italy, France and Spain, on Wednesday called for such a bond to raise money for battling the economic fallout. They pushed the idea in a letter ahead of a videoconference summit meeting Thursday.

Northern skeptics are still lined up against the notion. After initially noncommittal noises from Chancellor Angela Merkel, German Economy Minister Peter Altmaier told Handelsblatt this week that talk of "corona bonds" was "a phantom debate."

A corona bond would come with a guarantee from all member countries. That would put the financial firepower of Germany and the Netherlands behind a credit that might be used mostly to support other, weaker economies.



It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Thu Mar 26th, 2020 at 11:25:43 AM EST
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