As Europe’s fight against the coronavirus plays out, a political crisis is emerging over how the money needed to rebuild Europe is raised and how the risk is spread across a number of countries with starkly different economic outlooks
reports as the “partial cancellation of Nazi war debts” debated today alongside Germany’s unwillingness to consider a joint debt measure in Europe’s collective recovery from the pandemic. “Germany could never have paid it,” the letter reads, on the collective efforts made by European nations at the end of the Second World War.
However, In the opposition camp, Germany and the Netherlands see “pooled” debt as a thorny political issue which will result in their tax payers picking up the bill. Phillip Wool an MD at Rayliant Global Advisors describes this as an “obvious moral hazard” when richer European countries “cosign loans to nations whose spending they can’t easily influence.”mark a huge step towards financial integration in the eurozone.
Proponents of coronabonds are Greece, Spain, Portugal, Ireland, Belgium, France, Slovenia, Luxembourg and Italy. Perry Anderson, CEO of Quadra Global Capital Corp describes as “less fiscally responsible and more prone to seeking economic support.” The opposition, he adds, comes from the “Frugal Four” of “fiscally conservative EU countries” including the Netherlands, Finland, Austria and Germany.
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