If not handled correctly, the European Union’s transition to take on a new role as an issuer of public debt risks crowding out existing markets. Managing that transition correctly is almost as big a challenge as spending the money itself.
Date: December 9, 2020
Topic: European Macroeconomics & Governance
The COVID-19 crisis is set to propel the European Union for many years to come into a role its members had not anticipated: significant issuer of public debt.
If the EU’s budget and pandemic recovery package is approved, the 27-nation bloc will see its balance sheet transformed from occasional issuer to market stalwart. It will also take on a new role as market peer to some of the world’s most experienced issuers. How it manages that transition, and whether