Nagel (Bundesbank) with Macron: new geopolitical reality requires more common debt
Nagel: Put more debt together, also to create a capital market with high-quality assets that can attract foreign investors Lagarde calls for urgent action to strengthen EU resilience
In the face of the ongoing changes in the geopolitical reality, Europe must think about issuing more common debt, also to create a capital market with high quality assets that can attract foreign investors. This is what the Chairman of the Bundesbank Joachim Nagel said in an interview with Politico in which he therefore took a different position from that of Chancellor Friedrich Merz, who wants to keep the option of common debt only strictly as a response to emergencies.
"Making Europe attractive also means attracting investors from outside," Nagel said on the eve of an informal summit of EU leaders that is expected to address the economic challenges facing the union. "A more liquid European market for safe European assets would contribute to this goal."
The issuance of a European asset should only support 'specific purposes', Nagel explained, and 'it should be equally clear how it is controlled by the European authorities and the member states'. Eurobonds should also be accompanied by debt reduction at the national level.
Nagel's statement is in contrast to the position recently expressed by Chancellor Friedrich Merz. Only a few hours before the informal EU Council to discuss reforms, Merz had indeed rejected the idea of Eurobonds revived by French President Emmanuel Macron.
The eyes of the ECB are also on the European summit, which, as anticipated last Thursday by President Christine Lagarde, has sent all leaders a check list with priorities to be addressed, namely Savings and Investment Union, digital euro, deepening of the single market, promotion of innovation and protection of open strategic autonomy, simplification of legislation and strengthening of the institutional framework.
