Euro bonds in demand: a gamechanger for Europe?
The EU Commission has issued its first bond to finance its 750-billion-euro Covid recovery fund. Demand was huge: the bonds attracted around 142 biollion euros in orders - more than seven times the amount that could be issued (20 billion). An important milestone, commentators find.
The seed is quietly growing
The bonds are a first step towards Eurobonds, Avvenire comments jubilantly:
“As always, the forest that grows makes less noise than the single tree that falls. ... On Tuesday, Europe 'planted' almost without a sound - in stark contrast to how thunderous the debate over the idea of mutualising anti-Covid debt was in spring 2020 - the first bond of the Next Generation EU, the joint programme for restructuring the EU's economy and making it sustainable. ... Technically, they can't be called Eurobonds, but if we delete the 'almost' that can be put in front of them so as not to scare off the 'hawks' of the North too much, these new debt issues come very close to the idea of permanent securities guaranteed by the member states' budgets.”
Hopes for a quantum leap
The recovery fund may give the European project a fresh boost, the Wiener Zeitung believes:
“If this time, with the help of this instrument, the pan-European flywheel mass made up of its market power, innovative strength and production power is finally also given economic momentum, the EU would have hard facts to prove its own value to the world and above all to its ever-doubting members. ... Although the euro has created the prerequisite for benefiting from the world's largest single market, a financial and investment policy that is at least coordinated is still lacking if the potential of the common currency is to be fully realised. ... The recovery fund carries the hope of a quantum leap - with the jointly financed billions for climate protection and digitalisation as levers.”
No such thing as a free lunch
Greece will receive 30.5 billion euros from the Covid recovery fund over the next six years. Prime Minister Kyriakos Mitsotakis has evoked the "end of the pandemic-related turbulence and the start of a new era". Naftemporiki warns against euphoria:
“The euros are welcome. What patient who has been intubated for more than a decade [since the financial crisis] doesn't want to see light at the end of the tunnel? ... We are being given nothing more than the option to borrow funds under restrictive conditions and strict criteria. Oh, and not everything is free: of the 30.5 billion euros, 12.7 billion euros are loans under the Recovery and Resilience Facility (RRF), and the investments to be made may be lost along the way.”