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.
COVID-19 is a global killer. Austerity needs to succumb.
Meeting the fiscal demands of COVID-19 will require the European Union to borrow on capital markets more than ever, and for European pension funds and households to look more widely for ways to build their nest eggs safely. The EU should take the challenges of the pandemic and Brexit as a chance to get its financial infrastructure house in order.
The United Kingdom left the European Union on Jan. 31, 2020. Now, the U.K. must decide whether and how to extend the transition period, currently set to expire at the end of 2020.
In the negotiations between the European Union and the United Kingdom over their future relationship, we see a high probability of a weak contractual outcome, given the dominance of politics over considerations of market efficiency.
Lagarde needs a different bazooka in responding to a natural disaster like COVID-19.
A vision for Europe to prosper and best serve its citizens
While the euro is now a leading global currency and the European Central Bank has become a comprehensive banking supervisor, Europe’s markets have been treading water.
The head of German Finance has written in the Financial Times defending the need to deepen the banking union, now London is about to leave
Her success at helm of Europe’s central bank will depend on her ability to mend fences with hawkish policymakers.