Report
Patrick Artus

Europe always ends up doing what was initially prohibited

A first breach of European Union rules took place when Mario Draghi announced the famous “whatever it takes” and when Europe (the EFSF-ESM) supported the countries struggling during the euro-zone crisis. At the time, this amounted to abandoning the no bail-out rule by which the euro-zone countries would not come to the rescue of a country struggling with its finances or debt sustainability. A second breach of European Union rules took place when the “Next Generation EU” plan was introduced. The grants component of this plan consists in all European countries financing (through grants) investments in the EU countries struggling the most. This is a breach of the rule that Europe is not a “transfer union ” , according to which countries in good health do not transfer public money to countries in difficulty. The “direction of history” is therefore that Europe always ends up doing what was initially prohibited. This may also apply to what is still barred today: the European energy union, fiscal cooperation, European defence, etc.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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