About that €800bn EU defence fund just announced
€650bn of that - over 80% - is assuming Member States spend 1.5% of GDP more on defence over the next 4 years.*
This is based on the (already announced) relaxation of the EU rules on budget deficits.
But were fiscal rules ever the problem? (1/🧵)
€650bn of that - over 80% - is assuming Member States spend 1.5% of GDP more on defence over the next 4 years.*
This is based on the (already announced) relaxation of the EU rules on budget deficits.
But were fiscal rules ever the problem? (1/🧵)
Comments
Even with no EU fiscal rules, it simply can't add 1.5% a year onto its annual deficit. The constraint isn't the EU's rules, it's that investors won't follow. (2/🧵)
To now say "France, you're free to spend more" and then announcing "€650bn more spending because France et all will spend more"... no! (3/🧵)
Has Meloni indicated she will do this? It's unpopular. (4/🧵)
Honestly it could just as easily have said "over 10 years we will have €1.5 trillion". (6/🧵)
But member states already have the ability to borrow money, they all do it! The only difference is some might be able to get 1% cheaper interest rates. Not a huge deal (7/🧵)
The ECB could do government financing making investors irrelevant with the EC getting oversight, but no having sound policy is still not on the table