Bailouts, bonds and trust

The COVID-19 crisis will inevitably reshape politics and economics as we know it. This pandemic has shown us that “our social market economy has to become a bit more social and a bit less capitalistic” according to Pascal Lamy, former WTO director-general and EU Commissioner for trade. Joined by Mario Monti, former Italian prime minister and EU commissioner for competition, the two experts debated why they support the call for coronabonds, what a Europe post-COVID-19 will need and the urgency to restructure the outdated Multiannual Financial Framework (MFF).

They also discussed the need for real leadership to swap over from the national level to Brussels in these times of crisis. Monti elaborated on this, making it clear that “to let the European Union proceed and approach our dreams, we need leaders that are ready to sacrifice domestic popularity and re-election”. He also argued that the European Council is “really a place of destruction and distraction”.

Monti and Lamy then debated the role of advocacy. The former argued for persuasion, highlighting the need to bring reluctant member states on board by convincing their domestic public opinion. Lamy, on the other hand, called for certain Eurogroup policies to move forward without the involvement of opponents such as Germany.

In the end, both favoured the idea of coronabonds to tackle the large economic repercussions of the pandemic. Not least because “only a strong, joint EU operation can reach the ‘financial bazooka’ of €1.5 trillion needed for the recovery” according to Lamy. COVID-19 has also exposed how important it will be to continue to focus on a more green and digital future for Europe. Both the Green Deal and the Digital Strategy “need to acquire more plausibility and clout” for which a stronger MFF is needed