With regards to the issuance of common bonds of 500 billion euros by Emmanuel Macron and Angela Merkel.
Italian newspaper stated that it was something unimaginable, until a few months ago. A thrill of emotions animated the Italian establishment. Perhaps it’s the first step towards mutualisation of debt, and, perhaps, also the birth of a European confederal taxation. However, it is a proposal that will have to be approved by the EU members.
Meanwhile, in the midst of the greatest recession since the second World War, Germany, after the suspension of the Stability Pact, finances their own production system. The amount of financing is more than double. Some are even talking about the nationalisation of the economy. It would be wrong to think it is just an intervention due to the pandemic recession. Germany must above all finance the renewal of its industry and the modernisation of society. That industrial, digital and computer revolution, whose heart is in California, and a path the US has been walking for a long time, has completely escaped Germany.
Conflicts over the extent of EU spending and the size of the ECB’s intervention is based on the size of the available resources. There is not enough money for everything. The leap forward in the German economy must be of an impressive intensity because it is a lot of lost ground. Discussions with the EU on Eurobonds is in this. Real mutualisation of the debt may take place at a later stage, but for a smaller sum. USA is an exemplary case: for a long time, the federal debt was fraction of the debt of individual U.S. states. What is happening now is a complete renationalisation of industrial policies.
For Italy, it has had our country dissolve the State investments to make cash and enter the EU. But Germany has no other historical alternative than to continue to be an industrial nation and the productive heart of Europe. France is the land of Colbert’s dirigisme. Precisely Angela Merkel and Emmanuel Macron will prepare in the coming months a detailed plan of the resources of each EU member. The German Constitutional Court’s ruling on proportionality in the purchase of debt issued by EU states is on this very point. It’s not a message in a bottle to the ECB. Proportionality must be respected and so must the gap in political and economic power.
