As the coronavirus crisis subsides in Europe, another crisis may rear its ugly head again: the crisis surrounding the EU’s common currency, the euro. The euro crisis, which came to a head when Greece nearly defaulted in 2009-10, never really went away, and it could have profound consequences for the United States.
No eurozone government has openly declared insolvency during the coronavirus pandemic, but the European Central Bank has undertaken massive financial injections to avoid just that.
On top of this money printing, European governments have been spending like drunken sailors. Germany alone has committed €1.2 trillion in spending and guarantees, more than any other individual EU country. There is a real danger that German support for domestic firms undermines fair competition in the European Union, which its executive, the European Commission, is supposed to guarantee, although in this case it has remained silent.
Recently, European governments agreed to an additional €750 billion in COVID-related stimulus spending, dubbed “Next Generation EU,” which will add yet more to the burden already imposed on hard-pressed European taxpayers. The €750 billion will be borrowed on international markets — perhaps even from China —and jointly guaranteed by European governments, a development of considerable political significance in that it effectively represents a degree of debt mutualization that has thus far been resisted by the EU’s “north.” To pay back the jointly issued loans, the European Commission will be levying taxes directly, an encroachment on powers previously reserved to the members. With a “tax on non-recycled plastic waste” already levied on January 1, a “carbon border adjustment mechanism and a digital levy” may follow.
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See Also:
(1) Brexit warning: EU told one last chance of deal – as UK dodge £60BN Covid bill
(2) SNP shamed: Sturgeon accused of ‘misleading’ electorate over TRUE cost of independence
(3) UK heading towards no deal Brexit – EU ‘paralysing’ talks, says insider
(4) Angela Merkel warned economic troubles to get ‘much, much worse’ as pandemic ends
(5) EU crisis: Chief BBC correspondent claims Brexit could spark ‘Brussels breakdown’
