March 5, 2021

Von der Leyen opens the door to the “coronabonos” to help countries respond to the pandemic


In an interview with the German public radio ‘Deutschlandfunk’, the head of the Community Executive said that Brussels “is studying all the instruments.” “Everything that helps will be deployed,” he said.

“That also applies to the Coronabonos. If they help, if they are structured correctly, they will be deployed,” added the German in her interview.

The creation of mutualized European bonds, or Eurobonds, has traditionally received opposition from countries such as Germany and the Netherlands. In fact, almost two years ago, the European Commission presented a legislative proposal to implement sovereign bond-backed securities (SBBS) in which no progress has been made.

The economic impact of the Covid-19 pandemic and its consequences on European economies and risk premia has reawakened interest in these instruments. The heads of state and government have already debated the possibility of creating them at the teleconference summit that took place last week, although without reaching any conclusions.

Also this Friday, the Commissioner for the Economy, Paolo Gentiloni, has given an interview to ‘Rai’ in which he has assured that the issue of Eurobonds is not closed and it is a debate that “has to progress”. The Italian preferred to call them “European financial assets” and indicated that the institution in charge of launching them would be the European Stability Mechanism (ESM).

Precisely, the Italian Prime Minister, Giuseppe Conte, demanded this Thursday a greater involvement of the European rescue fund, whose CEO, Klaus Regling, detailed last week that he has an available loan capacity of 410,000 million euros.

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