In the sector of planning of European projects, it is important to be aware of what is happening in the European Union in this historical era. What measures are being taken to protect the economy of the Member States in the face of a health emergency?
What does Eurobond mean?
The term Eurobond was born in the context of the economic crisis in the eurozone between 2011 and 2013. It indicates a sort of solidarity mechanism for distributing debt at the European level (therefore among all the member states) through the creation of public debt obligations of the same Countries, issued by a European entity.
But the results of this plan were not positive. The proposal has met with various reactions from the Member States. On the one hand with enthusiasm, on the other with aversion, especially by the wealthier countries which, following the Eurobond line, would have had to bear an additional cost load in favor of the most disadvantaged states. (The example of Italy and Greece with high public debt and countries like Germany with its Northern allies).
For this reason, the project was never carried out and Eurobonds have never been used.
Why do we talk about it today?
Coronabond
In these days of tension, we hear so much about Eurobond-Coronabond. But what does it mean?
Referring to the previous description, the term Coronabond is an adaptation of the word Eurobond, acquired during the crisis we are experiencing today.
Therefore, through Coronabond, a Member State would ask for loan money to be able to finance mainly its response actions, including standard ones such as healthcare, hospitals, military expenses, etc. and extraordinary ones such as the case of the coronavirus emergency.
With this, the debt would be shared among all Member States.
What are the bonds for?
Specifically, therefore, the coronabonds would be used to help countries with reduced economic availability to face the great battle against the spread of the epidemic in terms of expenses, especially in the health sector (expenses for hospitals, intensive care machines, masks, gloves, research, etc.) and in the economic one.
The economic issue mainly concerns a future perspective as we are experiencing a great crisis that is severely testing the production system of the affected countries, and important interventions will be necessary for their re-growth.
For more information check HERE (in Italian).
