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Are corona bonds a moment of truth for the EU?

Graham Watson

25th April 2020

This article is a reflection on the future of the EU which wonders whether coronavirus is its ultimate test of unity.

For many years, many people have wondered whether for the EU to remain unified there would need to be fiscal transfers from richer to poorer states.

In this case, the question is about whether the issue should attempt to mitigate the crisis by issuing so-called corona bonds. However, rich states, like the Netherlands, Germany, Austria and Finland are opposed to the scheme because they feel that they are picking up the tab for less prudent members such as Italy and Spain.

In many respects, it's a re-run of the debate over fiscal transfers from the core to the periphery that was a feature of the Greek crisis.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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