The ‘Next Generation EU’ budget proposal has brought a common eurozone bond market suddenly and unexpectedly much closer. To fund the recovery, the EU Commission will go directly to the markets in the next two years and raise €750 billion. This will give an enormous boost to a common euro-bond market, a conditio sine qua non for long-term stability in the eurozone, the European capital markets, and the international role of the euro. It also is an impetus for further joint work on government bond issuance and settlement procedures, and for expanding maturities coverage.
The full text of this ECMI Commentary is available here.