Europe’s Non-Hamiltonian Muddle
— June 1, 2020
By Nouriel Roubini an Brunello Rosa
The money issued through this so-called “Next Generation EU” plan will flow through European Union programs, in order to achieve the Commission’s goals, including its green and digital economy agenda. The Commission will raise funds in the market by issuing long-term bonds, and their efforts will be backed by a suggested increase in new taxes, such as those on greenhouse-gas emissions, digital services, and other areas of supranational commerce.
Though we are among the few commentators who anticipated that the EU would offer a plan much larger than what most market participants and pundits expected, we also would advise European policymakers to remain realistic about what can be achieved at the moment. Celebrations of the EU’s long-awaited “Hamiltonian moment” of debt mutualization are premature.
Read the full Project Syndicate article.
Nouriel Roubini is a Professor of Economics and International Business and the Robert Stansky Research Faculty Fellow.