It's the Perfect Moment for the EU to Issue a Joint Bond
Ready to share? Joachim Nagel of the Bundesbank (l) and Germany’s finance minister Lars Klingbeil.
Photographer: Kay Nietfeld/picture alliance via Getty Images.
In crisis there is opportunity. With two wars on Europe’s doorstep, the need for a unified response has rarely been more pressing, and the urgent need to stiffen the European Union’s military defenses will be expensive. What better way to pay for that than the bloc jointly tapping the bond markets, as it did when pulling together an €800 billion ($925 billion) rescue package for member states during the pandemic. There’s a raft of other stuff that can be fixed at the same time.
With inflation in the euro zone below the European Central Bank’s 2% target — unlike in the US or UK — reopening the money spigot is less of a danger. Furthermore, the yields on bonds of pretty much all of the EU member states are moving closer to Germany’s, which historically has had cheaper debt than its continental peers because of its economic strength.