The European Union and 750 billion euros
What’s going on today?
In the evening, the ECB decided to market 750 billion euros. This is due to the Coronavirus emergency.
What does that mean?
The ECB has voted for moves to protect sovereign debt. As a result, the Treasury bills are falling, allowing us to get into debt at a much lower cost. It is needed to cope with the probable recession that European countries will encounter. Below, in the graph, you can see how the returns have fallen thanks to the Bazooka.
IS THAT ENOUGH FOR YOU?
The situation is very complex. After the departure of the President of the ECB, Mr Lagarde, Europe certainly had to do something not to give way to the sovereignists.
There are many manoeuvres which, in my opinion, the EU must pursue.
Eurobonds: Eurobonds are a hypothetical joint and several debts distribution mechanisms at the European level through the creation of public debt bonds of the eurozone countries, to be issued by an appropriate agency of the European Union, whose solvency is jointly guaranteed by the eurozone countries themselves.
Issuance of safe assets to finance European projects
European Fund lending to States in need or allowing them more room for fiscal manoeuvre
A European industrial policy to strengthen convergence and prevent the enormous imbalances that we still have.
ARE WE AT THE END OF THE EUROPEAN UNION?
Every crisis puts a political system in a corner. The EU, if it does not respond optimally to the economic crisis that will come, will certainly be at risk. Now is the time to do, just discuss. No unanimous vote. It is necessary to do something.