Summary of EU Debt as Insurance Against Catastrophic Events in the Euro Area

Looking for the article?
We have the summary! Get the key insights in just 5 minutes.

EU Debt as Insurance Against Catastrophic Events in the Euro Area summary

Editorial Rating



  • Analytical
  • Overview
  • Hot Topic


Policy makers in the European Union’s member countries must walk a fine line between inaction and misdirection in their search for a way to combat the economic malaise wrought by the coronavirus. EU-issued debt could serve as an effective, temporary backstop to bring some degree of relief to the region’s economies. As this astute analysis from economist Guntram B. Wolff reveals, this insurance instrument should derive from EU institutions rather than from national governments. Such an approach would be more politically viable, no small feat in the rough-and-tumble obstacle course that is the European Union.

About the Author

Guntram B. Wolff is the director of Bruegel, a European think tank.


The issuance of EU debt could provide a viable insurance mechanism by which to manage the sharp economic declines that the coronavirus has caused member states.

European leaders are scrambling for ways to alleviate the region’s severe economic woes from fighting the COVID-19 pandemic. A potential tool could be EU debt, even if the euro area’s taxpayers and national budgets would be on the hook.

The use of supranational debt would necessarily be a collaborative effort, requiring member states to cede control over income and expenses to a certain degree. With some work, the pursuit of this solution through the EU Treaty could be a possible way to restore stability to the macroeconomy.

The use of debt...

Comment on this summary

More on this topic

By the same author

For the euro there is no shortcut to becoming a dominant currency
An Effective Economic Response to the Coronavirus in Europe
The Implications of a No-Deal Brexit
Making a Reality of Europe’s Capital Markets Union
Manufacturing in the US
Europe after Brexit
Which Fiscal Union for the Euro Area?
EU Recovery Fund
Why has COVID-19 hit different European Union economies so differently?
The financial fragility of European households in the time of COVID-19
The European Green Deal
Chronicle of a Pandemic Foretold
Brexit: What’s Next?

Related Channels