Coronavirus reopens Europe’s angry divide
But these major steps are still only temporary. Whenever the pandemic passes, countries will emerge with their economies ravaged, uncertainty scaring off investors, unemployment spiking and public debt skyrocketing. The widely derided austerity measures of a previous era are now political suicide for policymakers. More stimulus — closer to the scale of $2 trillion now being spent by the United States — will be needed.
To do that, nine pandemic-hit governments in the euro zone — led by Italy, Spain and France — proposed joint bond issuance, which would combine securities from different European countries. “Debt would be mutualized and not sit on any country’s balance sheet, and the funding cost would be lower than it would be for most highly-indebted governments,” explained Pierre Briancon in Barron’s. “The proceeds would be spread among eurozone members according to their actual needs.”
These “coronabonds,” as they have been branded, were supposed to be an instrument of unity at a time of continental crisis. Instead, Germany, the Netherlands, Austria and Finland — dubbed in media as …continued .
[Source: Washington Post]