Germany and France Move Closer to a Euro Bond
Investors would snap up any new debt for a European Covid-19 recovery fund, so now it’s just up to the politicians to make it happen.
Getting closer.
Photographer: Alex Kraus/BloombergMake it quick and keep it simple. That seems to have been the thinking behind Emmanuel Macron’s and Angela Merkel’s surprise master plan for a 500 billion-euro ($543 billion) Covid-19 recovery fund, to be paid for collectively by the European Union and doled out as grants to the bloc’s worst-affected nations.
The details are yet to be thrashed out, and there’s still plenty of scope for opposition from fellow euro area members, but this does look like a genuine attempt to share the financial pain from the pandemic between Europe’s weaker and stronger nations. The spread between Italian and German 10-year bond yields fell by 30 basis points in response.