The European Union is unlikely to adopt a Spanish proposal for permanent large-scale joint borrowing, but the debate will likely contribute to a gradual expansion of common debt for strategic priorities, further normalizing it as an instrument of European economic policy. Ahead of a meeting of eurozone finance ministers on July 9, Spanish Economy Minister Carlos Cuerpo proposed the European Union issue as much as 850 billion euros ($971 billion) in debt annually, creating a deep market for common European bonds and a permanent "European safe asset." Cuerpo argued that Europe's fragmented sovereign bond markets prevent the euro from fully competing with the U.S. dollar and raise financing costs for investments that benefit the bloc as a whole. He stressed that the proposal would not mutualize existing national debts or establish permanent fiscal transfers, but instead provide a common financing instrument for future investments. Initial reactions at the Eurogroup meeting...
