Recently, the hottest thing in Europe is Ukraine's defeat in the battle for Avdeyevka, which the Ukrainian side blames on the fact that Europe and the United States gave little money and were late.
In fact, with the increasing challenges of the global economy, Europe and the United States themselves are difficult to protect, financial resources are naturally limited, the United States has a Federal Reserve, Europe has nothing, all for nothing, of course, a lot of money belongs to loans, the key problem is not to pay for nothing?
More recently, and even more alarmingly, the Estonian prime minister suggested that the European Union should develop a plan to issue 100 billion euros ($107.8 billion) in eurobonds to boost the continent's defense industry while providing more to Ukraine**.
"Bonds issued by individual countries are too small to be scaled up, and eurobonds could have a greater impact," she said. At the same time, Estonia also called on the European Union to spend 025% of GDP to support Ukraine.
To be able to say these words shows that more and more countries in the EU have run out of money and now have to rely on bond issuance to help. Interestingly, the EU recently agreed to a long-delayed reform of its fiscal rules that would allow countries to reduce excess debt at a slower pace in four to seven years, thus giving the Treasury more room for public investment.
Originally, the EU had rules - the public deficit was limited to 3% of GDP and the national debt was limited to 60% of GDP, which was temporarily stopped after the epidemic came, and now we are discussing when to continue to implement it.
The problem now is to reduce the budget and then increase it in order to increase aid, and the contradictory EU can be described as a strange one.
Moreover, the EU now seems to have given 4-7 years to let member states rein in debt, but loose rules increase the likelihood that large countries such as Italy, Spain and France will not be able to control their high ** debt, leading to eurozone tensions.
BNP Paribas economists estimate that the new fiscal requirements will reduce GDP by about 01 to 02 percentage points. Morgan Stanley economists believe that Italy, which has the highest debt burden among the major economies in the eurozone, will also find it difficult to reduce the debt burden.
It can be seen that most economists and even institutions are not optimistic about the EU's strategy, and the end result is still that countries such as France, Italy, and Spain survive on debt.
And they seem to be already planning to lie flat, for example, France thinks that the Estonian Prime Minister's proposal is very big, and it will be enough to issue debt aid. The problem now is that many EU countries, such as Germany, the Netherlands, and some Nordic countries, oppose the use of euro credit to issue bonds, or joint bond issuance.
Of course, as long as the war is still going on, these countries that spend their money cautiously will eventually compromise, and even if there is no war, they want to hold together.
The problem is that in the long run, most of the ** expenditures of the countries that spend money "thrifty" are used for people's livelihood, so the welfare benefits of these countries are very high, but as the money is more and more subsidized, more and more long, and finally the impact even greatly touches their own interests, this cycle is over.
At this time, the biggest trouble is how to repay the joint bonds, which will directly affect the financial credibility and stability of the euro. Some European countries are now proposing the creation of a European Treasury similar to the European Central Bank, which will be used exclusively to issue bonds.
It seems reasonable, but in fact it can't last long, and it is still the original problem, who will repay the debt, who will pay it back, who will pay it back, and who will pay it back less, will produce a great contradiction.
Therefore, as soon as the EU endorses the euro in order to issue a joint bond for Ukraine, the result must be the early disintegration of this currency.