Eurobonds due to Corona

CommadantCipher:

I know that Poland is not in the Eurozone, but I guess that Eurobonds would be available for all EU countries, not just those in the Eurozone. This should be the case, because the coronavirus will cripple most economies in Europe.

Bonds issuance is strictly related to the currency and given that Poland has another currency/central bank, it's not even on the table. They aren't part of the EUCO etc either.

Given also that Eastern Europe is poorer than the West, it'd make Germany/Holland etc even less likely than they already are to accept the idea.

Now you will tell me that Germany has amassed massive surpluses and can finance her needs with minimal needs for debt - at least for the time being. Good on them. Most European countries, however, are not in this condition to do so. Greece in fact was just beginning to recover before the coronavirus struck. The coronavirus has smashed the Italian and Spanish economies - in Italy in fact the strongest region has been most heavily struck by the virus - and will cripple my country's economy, too. Now Greece has amassed surpluses and we will be able to survive the lockdown we have, but if there is a second resurgence of the virus, we're smoked. And the longer this pandemic continues to spread, the more damage will be done.

This is the time you realize that any talk of ''recovery'' for Greece was complete crap. The program for Greece prescribes surpluses until... 2046, at least. This in case of no recessions. It is extremely hard for me not to insult whoever came up with these kind of ideas, because quite frankly, given the shaky foundations of the Greek economy, making a debt reduction program over the course of 30 to 50 years expecting no recession is sheer intellectual dishonesty. Greece should do what it should have done years ago, default, leave the Euro. Same for the rest of S. Europe. Germany does exactly the same, they do what's best for them. You have an asymmetry: S. European politicians are absolutely enamored with the idea of the United States of Europe, thinking it'd fix their countries problems, so they are ready to supersede national interest every time. Northern politicians despite their claims of being pro-EU staunchly defend their national interests (and rightfully so). As a result, the North always wins, just like it happened yesterday, 6 years ago, 8 years ago, etc.

Hence the need for stimuli, i.e. debt. But actual local resources are limited, if not expended. This will mean foreign and supranational capital and it will indeed mean austerity in the future, but a permanent loss of production and 40-50%+ unemployment with limited capital is a disaster that must be avoided. Few nations in Europe can muster the stimuli needed to save their economies and even fewer have amassed surpluses. Right or wrong, this is the reality. The "worthless pro-Eu (sic) politicians in the South" face the same reality as the "valuable anti-Eu politicians in the North" because the coronavirus is not the fault of any EU country.

Moreover, the EU is more of a benefit to Northern European countries than it is to Southern European countries. While Italians wouldn't mind the lira too much, the German industries would dread a Deutsche Mark. Germany's excellent economy is actually its Achilles' heel and would drive the DM to God-like levels, which means more expensive German exports. Therefore, the Germans have a vested interest in the Euro. The EU will not survive an Italexit, because Italy is the third biggest net contributor to the EU. If Italy were to ditch the Euro, again it would not survive.

The point is that the EU is built on solidarity and without it, it becomes politically worthless. If Italy resorts to China for help, or goes to the IMF on her own without EU support, or the Eurobonds are not issued, that "solidarity" will be equal to "shit" to many Europeans. That will be the end of the EU, which I am sure you would celebrate. As a pro-EU Southern European myself, I am positive that there are scores of pro-EU Northern Europeans. Together we will fight for the European dream. The death thereof will be a defeat for us. The incentives to let the EU die exist, but so do the incentives to keep it alive. It is us, or nobody.

How many times do you have to be disappointed to accept the cold harsh truth?

As things are going now: Option 1: ESM funding WITH conditions, despite Conte-Gualtieri insisting it should be unconditional due to the emergency. My latest info say Conte and M5S won't support the conditional access, but Gualtieri and PD will. The condition will be a wealth tax, almost certainy. I personally want to see this happening because wealth tax are extremely unpopular in Italy, yet the most pro-EU crowd are the wealthiest. So it's either the pro-EU crowd in Italy pays for Italy to remain in the Eurozone or face revolution. Option 2: capital segregation. Italy gets de-facto booted by the ECB from the free movement of capital regime like it happened to Greece years ago, to squeeze the government and force it to surrender to option 1. Option 3: Draghi either President of the Republic or Prime Minister. He still won't have more room than Conte-Gualtieri. Option 4: sale of state assets or long term concessions of historical palaces. PD has already hinted that. Again, it would be national humiliation as the cost of belonging to the EU now becomes losing the national heritage. Option 5: Mattarella-Conte-Gualtieri are removed. Unfortunately Salvini, who's the main alternative, has so far shown lack of leadership skills in this crisis. If there's a time for radical solutions it's now.

Unlikely given the numbers Italy and Spain will face.

What's likely at this moment:

Some sort of minimal fund, think 20 bn as ''solidarity'' contribute with very strict conditions. Possibly the ESM under other names. Oppositions will pick that up with ''under the guise of helping us, governments brought the Troika at home and sold us out''.

This while business shut down, suicides start, revolts as well. Summer will be boiling.

Conte has postponed his press conference twice today, so hard to say. Public, depends: PD voters call it a ''victory for Italy'', League voters are calling for the resignation of Gualtieri for treason. M5S is split.

Short term reactions are kind of irrelevant anyway, if it ends up with a medium to long term damage, as it's likely it will be, then Conte will end up like Monti.

Edit: Conte postponed the press conference again. PD officially calling for a wealth tax for anyone above 80k yearly income. Let it roll. If that's the case, Italy will have to terminate free movement of capital. Much welcome development.

Edit 2: Conte is pretending that yesterday's outcome doesn't matter, also excluded the wealth tax. Government over? Nvm, he's blaming Salvini for ''undermining the Italian negotiation position''. It's their fault if he failed. Lmao. He still claims he'll get the coronabonds. Snake oil salesman.