With Eurozone governments spending huge amounts to fight the recession caused by Covid-19, the debt sustainability debate and how to manage it will only intensify in the coming months. Positive Money Europe’s new report, written by Sebastian Diessner, assesses the merits and drawbacks of different monetary finance proposals with the potential to revive the euro area economy.
Over the past years, the ECB has always mindfully avoided rejecting helicopter money on legal grounds. This view was reaffirmed by Christine Lagarde in a recent letter to one MEP, who argued that more research on the topic is needed.
The European Union (EU) is pretending it will unlock trillions of Euros to address the coronavirus crisis. But if we look closer, we realise this is too little, too late, and will only drive countries already struggling into further debt.
As a new recession looms in the runup of the Coronavirus crisis, Positive Money Europe’s newest report outlines why and how “helicopter money” should be deployed as soon as possible in the Eurozone.
Europe needs helicopter money to cope with the severe upcoming recession while avoiding a massive unsustainable debt burden. As soon as the economic recovery phase starts, the ECB should boost consumption in a fair way by sending money directly to all citizens.
The ECB launched a massive 750 billion euro plan to cope with the Coronavirus crisis. But these measures will only work if national governments spend as much as is necessary and outline an ambitious plan to tackle the recession.
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