Europe’s ‘coronabonds’ are a far-off solution to an urgent problem – The National

Europe’s ‘coronabonds’ are a far-off solution to an urgent problem – The National

Europe's 'coronabonds' are a far-off solution to an urgent problem. The proposed collectively issued EU debt to support spending on the pandemic is the wrong priority. What Europe most does not need is to get bogged down in a debate about the best long-term solutions to an urgent problem.. If the European Union were a true fiscal union like the US, it could spend in support of its member governments, borrowing the necessary funds and servicing the resulting debt with the taxes it collects.. That's the trouble with the proposal for so-called coronabonds, the proposed collectively issued EU debt to support spending on the pandemic.. Collective borrowing isn't just a matter of getting governments to agree to emergency outlays and to jointly guarantee the debt, which is difficult enough.. Since the EU collects no taxes, the governments would also have to say how the cost of servicing the bonds would be allocated across the member states.. The design would affect the credibility of the joint guarantee and the way the debt was priced in financial markets.. In the short term, there's no need for these complications.. The crucial thing is for the European Central Bank to stand willing to buy