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Commentary on Corona Bonds: Pandora’s Box

by drbyos

DEU finance ministers can argue like troublemakers even in difficult times. After all, the future of Europe depends on the heads of state and government who, when in doubt, are looking for a compromise to cover their nights. After the failed meeting of finance ministers, especially Chancellor Angela Merkel and French President Emmanuel Macron will have to find a solution to the only ostensibly Italian-Dutch conflict over European financing of the crisis.

You have come a long way with common solutions. In principle, the use of the ESM crisis fund, which until recently seemed unacceptable to southern European governments and some economists in Germany, is no longer controversial. Now it is a matter of the requirements that are supposed to be associated with lending to individual countries.

Even if the dispute over these conditions was very hard at the ministerial meeting, a compromise can still be found. However, the dispute over Eurobonds lurks behind the conflict over the ESM. It does not matter whether they appear in the crisis as so-called corona bonds or as joint bonds with which a reconstruction fund is to be financed after the crisis. It is not even certain today whether one will need such a fund. Proponents of such bonds know very well that if they were introduced as emergency aid, they would change the architecture of the euro zone in the long term. This is probably not the least goal of many supporters.

The defensive claim that it will remain in an exceptional case shows at best political naivety. You don’t have to look over the Alps for a receipt. For example, the economist Achim Truger, a member of the Expert Council, welcomed the idea on Twitter to fund the EU Commission’s Green Deal with “green corona bonds”. If the opportunity arises, Truger will certainly not be left alone: ​​anyone who opens Pandora’s box can never close it again.


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