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At an unprecedented time of crisis that one hopes will never recur, when all other taboos 1) state aid 2) open borders 3) GCC declaring ECB / ECJ decisions illegal 4) unprecedented domestic aid schemes etc have been broken, this was a time to break the real taboo on fiscal union
And that opportunity has now been missed. The taboo that has been broken is a small one that is at best incremental (aid to poorer MS already happens and so does EC/EU borrowing) when what was needed was the taboo of fiscal union to be broken, even if the magnitude were modest
I don’t think Euro 500 billion spread over 3-4 years is a “huge” sum given magnitude of what is happening. Given limits on asymmetry of capital key vs. grant key it’s unlikely to be more than 2% of gdp. Add constraints on asymmetry of QE imposed by @BVerfG Italy may be worse off
Even this “modest” proposal would not have passed #German muster had it not been for the Molotov cocktail the #GCC threw. It’s Merkel’s attempt at fire-fighting & its not good enough. We’d be better off without #GCC decision and without this #RecoveryFund as #ECB unconstrained
My 3 year old insisted a add a monkey in my tweet 😂. To conclude, has a #German taboo been broken? Yes! But only a “minor” one compared to the big taboos that needed to be broken both to respond to the #covid crisis & for l.t #EU / #eurozone reform. If not now, then never
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