Euro Bailout Chief Sees Hurdles to Quick ‘Coronabonds’

The head of the eurozone’s bailout fund said it would take between one and three years to set up a new European institution to issue so-called coronabonds, the Financial Times reported. Any extra joint debt issuance would in the short term have to come from existing mechanisms. With political temperatures rising over calls for euro area governments to collectively issue bonds to tackle the coronavirus pandemic, Klaus Regling, the managing director of the European Stability Mechanism, said European institutions have already issued more than €800bn of mutual debt in aggregate. He added they could raise more if needed. If the goal is to cover short-term crisis-related financing needs such as expanding healthcare or supporting businesses “then I think the only way is to use existing institutions with existing instruments,” he told the FT in an interview. “In the longer term, there are other options.” The eurogroup has placed the ESM at the heart of its plans for a joint response to the economic impact of coronavirus. Read more

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