What are corona bonds? Thanks for asking!
A political crisis is currently emerging in Europe, and it’s down to Corona bonds. The term is derived from eurobonds, which were joint bonds issued during the debt crisis at the start of the last decade. The idea is that investors loan money to the entire Eurozone bloc, which is then forwarded to individual states. It’s been a divisive issue in the past, and it’s causing debate again in the context of the coronavirus pandemic. Old tensions are being exacerbated; some countries are calling for greater solidarity from their fellow members, while others feel they shouldn’t have to bail out less responsible neighbours. Europe Day is celebrated every year on 9th May, commemorating the date of the Schuman Declaration in 1950. But in 2020 Europe is far from a celebratory mood. While member states try to contain the Covid-19 epidemic, the EU itself can’t act directly. The scope for it to legislate in health policy is limited. But it holds greater influence in economics and finance.
So, what are the solutions to the recession that's already hitting now ?
States are indeed going to have to invest large amounts of money in order to save their economies. To do so, they have to borrow from a wide range of domestic or international sources, like other states, banks and insurers.
Kind of like someone taking out a mortgage at a bank, right? And what’s been decided then? In under 3 minutes, we answer your questions!
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