EES Online-Seminar, June 17, 2020
“Eurobonds, Coronabonds, Debt Community - Europe's Crossroads",
cooperation event with SME Connect and TAE
More and more and higher and higher, this is how one could also describe the current programmes - both national and EU - being set up to deal with the consequences of the Corona crisis. The billion is becoming the smallest unit of account. The European Central Bank (ECB) is currently increasing the volume of the Pandemic Emergency Purchase Programme (PEPP) by another 600 billion Euros to a total of 1.35 trillion Euros. At the same time, the program is being extended until at least mid 2021.
Although the corona funds already made available by the European Stability Mechanism (ESM), the European Investment Bank (EIB) and the European Commission have not yet been exhausted, the European Commission has recently launched another comprehensive reconstruction programme with a total volume of €750 billion under the name "Next Generation EU". This money is to be raised on the capital market and the 27 member states are to jointly guarantee it. Repayment is scheduled to start in 2028 (the next but one EU financial framework) and is to be completed by 2058. For the first time, the EU will thus enter into long-term debt.
While Southern Member States are in favour of grants, Northern Member States (especially the "Savings Four") insist on earmarked loans with clearly dated repayments. On the one hand, they demand more European (financial) solidarity, on the other hand, they demand budgetary discipline and the will to reform. Whatever the outcome of the negotiations, "Next Generation EU" and the further Corona support will change the European Union forever. The crucial question is, in what way?
These and other topics were discussed intensively in this webinar. Because one thing is clear: all debts must be repaid.
The question then arises: When and who is to pay all this?