Coronabonds: The forgotten history of European Community debt

a column by Sebastian Horn (University of Munich, Germany) and Josefin Meyer and Christoph Trebesch (Kiel Institute for the World Economy, Germany) for VOX: CEPR’s Policy Portal

The introduction of European Coronabonds is sometimes described as an unprecedented step that would create a dangerous precedent of debt mutualisation.

This column shows that this view is wrong and ignores the history of European financial cooperation. Since the 1970s, the European Commission has placed more than a dozen community bonds on private markets, which were guaranteed by the member states and distributed to countries in crisis. These bonds have been fully repaid in the past. Coronabonds with joint and several liability go a step further, but they would stand in a long tradition of European financial solidarity and cooperation.

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Labels:
coronavirus, COVID-19, Coronabonds, debt, ESM,

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