The frustration of most Southern Europeans at the reluctance of most of their Northern partners to aquiesse to the introduction of “Euro-bonds” as a means for their economies to cope with the consequences of the pandemic, is understandable.
Certain Dutch utterances may, indeed, have sounded blunt and lacking in sensibility –unlike the discreet and well equilibrated language used by the German minister Mr Scholz. Nevertheless, an objective judge should not fail to recognize that the difficence of the fiscally sound members of the Eurozone vis a vis so radical a measure –and difficult to control in its implementation–, as the circulation, urbi et orbi, of anything resembling a Euro-bond, such as currently described by its advocates, also merits a degree of understanding.
Weak faith, in the soundness of the national institutions and the economic governance of the Southern members of the single currency zone, is real, and not totally unjustified. Many of the latter have grossly misbehaved fiscally in the past, and even now –first and foremost France and Italy–, find it difficult to adopt necessary structural reforms.
On the other hand, it is self-evident that the burden of sovereign debt, already almost unsustainable, which several countries must endure –be it because of their own misconduct or not–, cannot be further increased. If their economics are to survive the quasi coup de grace inflicted by the pandemic, support to them must be given in the form of subsidies and grants which will not have to be paid back. The pandemic is a natural disaster. If the EU is to last, it commands solidarity.
But then, as we said, there is a wall of suspicion between those partners who had misconducted themselves, some even grossly, and were, already, in narrow straights, and those who are usually expected to foot the bill of the former’s, chronically dysfunctional and profligate statism.
Thus, any final, rational response to this latest challenge at EU solidarity, and sense of self-preservation, must be much more accurately focused on Covit 19 related damage done to economies. No space of maneuvre must be left, to any one, to exploit funding aimed at dealing with the pandemic, to sedate and dissimulate preexisting pathologies. The definition of Euro-bonds, as it is now, does not seem to guarantee this. Added means and procedures of control and, perhaps, special supervising authorities would be needed to.
Last but not least: the Pact of Stability must be reactivated as soon as recovery begins to take hold. Some hope to be effectively done with it· that they will be able to eternalize its suspension. If they succeed, they will not, only, be done with the Pact of Stability, but, also, with the single currency, and probably, the EU itself.
With regret we bring to the knowledge of our readers that the printed edition of this paper is being suspended.
The multiple difficulty to continue printing and distributing monthly issues in the present circumstances is, we hope, well understood. This is but a totally non profit and self-financed free-press initiative.
Our website edition will be continued until June, and then as of September.
Best wishes to all.