The ongoing economic crisis triggered by the coronavirus pandemic has, unsurprisingly, exposed the Eurozone’s institutional weaknesses and shortcomings. The debate regarding the necessity for the establishment of a joint debt instrument among its member states is nothing new as it can be traced back to the very first years of the introduction of the Euro. This became more intense throughout the sovereign debt crisis and has now culminated as EU member states try to find ways that will foster a sustainable and rapid economic recovery. The current proposal of the European Commission foreseeing joint debt issuance does not constitute the establishment of a Eurobond and is a one-off issuance in times of emergency. This brief discusses the importance and merits that a joint debt issuance will have among the member states, and argues that the viable future of the Eurozone is contingent on the permanence of such an instrument alongside the presence of an autonomous fiscal capacity.
You may find the Policy brief by Dimitra Tsigkou, Junior Research Fellow, A.G.Leventis Foundation Research Chair Fellow here(in Greek).