A key instrument against forthcoming crises that June European Summit should create to reinforce euro's architecture is a eurozone budget. That budget would not rescue countries at risk of bankruptcy (in charge of stabilization mechanism, half a trillion euros) or its successor, a FME more or less communitized, which is mattress against a serious threat against whole of area.More information
- The east and several countries in North reject EU budget
- "European money cannot be allocated to countries that do not respect rule of law"
- Brussels plans EU budget to displace East funds to south
It would be parallel or complementary. France suggested a budget of 2% per annum (24 billion) of eurozone GDP (12 trillion long) double rate of EU-wide budget. Germany was suspicious and Nordics were opposed.
So Commission launched idea of an alternative fund focused on countering lower-range recessions, affecting some and ors not: product of asymmetric shocks. It would be between 30 billion during budgetary septennate (0.28% of eurozone's annual GDP) and 100 billion. It would serve to supplement with subsidized loans part of investments that states Jibarizan to first sign of recession and collapse of ir budgetary income. A project bought — albeit without figures — by Chancellor Merkel (FAZ, 3/6).
The amount of "investment fund" was criticized for its low macroeconomic relevance. But next to anor new
Fund to support reforms undertaken by aspirants to euro, would almost double (with 25 billion more).
The budgetary relevance for those affected would be much more substantive, as main (but not unique) clients would often be most vulnerable. The rescued yesterday (Greece, Portugal, Ireland and Spain) comprise 14% of eurozone, 1.7 trillion (according to key of distribution in capital of ECB), so that flow of aid would intensify by seven times.
And very relevant for each country. The supports would only be asked annually. And maximum requestable stop for each one would be 30% of total available: 9 billion if bottom is smaller; or 30,000 (difficult) if equipped with 100 billion. With very minor additional amounts to subsidize loan interest rates: obtained on market by Commission and delivered back to back to beneficiary countries.
With se scales, Spain could have kept in Great Recession and years after its public investment in R D. And a good pinch of 18.6 billion cut annually from total investments, in relation to good times. Let us remember that Spain already receives 11,592,000,000 euros in public investments of EU (2016).
And money would also come from European debt issue, backed by common budget of 27. A Eurobond essay. Not massive. But who does not begin does not culminate.