Economy: Series: we need the eternal bond because our civilization is in danger

The European Union must unite, otherwise it will fall apart – this is the title of György Soros’s guest article on Spiegel. In his brief, the American businessman of Hungarian descent continues his argument for the perpetual annuity bonds he has previously raised. As she wrote, Ursula von der Leyen, President of the European Commission, estimates that a billion euros will be needed to face the crisis after the coronavirus epidemic, that is, 350-360 thousand forints, depending on the exchange rate. Soros adds:

Von der Leyen did not mention it, but once again 1 billion euros is needed to mitigate the effects of climate change.

According to Soros, only the perpetual annuity bonus is adequate to raise such an amount. The businessman recalled that this is not a new idea, in the United Kingdom, for example, it was used as early as 1751, then such perpetual bonds were used to finance the expenses of the Napoleonic Wars and then the First World War. Soros estimates that if the EU needed € 1 billion, it could already get it with 0.5 percent interest bonds, which would cost € 5 billion a year. This is a small amount in trillion terms, on the one hand, and on the other

the amount of interest is predetermined, so taking into account inflation, it will close to zero in the long term.

At the EU summit on April 23, where von der Leyen revealed the cost of crisis management, Spanish Prime Minister Pedro Sánchez raised the issue of perpetual bonds, but there was no substantive debate about it. And after the summit, the EC President only spoke of billions instead of billions of euros: Soros said it was a sign that something had gone wrong. The reason for this is sought in the 1957 Treaty of Rome establishing the European Economic Community. However, he added:

Extraordinary measures are needed in exceptional times, otherwise the EU may not survive the current challenge. It is not a theory, it is a tragic reality. “

Coronavirus and climate change threaten not only human lives but our entire civilization. The European Union is particularly vulnerable because it is based on the rule of law and, as is well known, the mills of justice move slowly. The coronavirus, on the other hand, is fast and unpredictable. That is why the EU needs quick responses and perpetual links.

Soros also emphasized that these are not the same as coronavirus linkages, which he said would only deepen the gap between the north and south of the union and the west and east, i.e. the new and old member states. Perpetual bonds, since they would provide resources to all Member States in the same way, would have a unifying effect. Either way, the businessman says the solution will have to be decided in the summer, because Italy, for example, could go bankrupt in the fall.