International Economics: IB Economics

As I've already suggested, many think that coronavirus and the recovery from it poses an existential threat to the Eurozone, particularly if the German courts continue to present opposition to the notion of fiscal transfers and sharing responsibility for rebuilding the Eurozone economy. 

As a result of the largest recession in the EU's history and the inequality that is going to ensue, some wonder whether the Eurozone itself, and the single currency are going to survive. 

Larry Elliott looks at how the coronavirus has taken its toll on relations between EU member states, noting that far from promoting collective security, the crisis has seen isolationism, the shutting of borders and a lack of agreement over a stimulus package involving the selling of coronabonds. 

Troubled times, and the sorts of disagreement that might see EU leaders rethinking that nature of the organisation.

I can't believe I missed this earlier in the week. It's a reflection on the future of the EU which wonders whether coronavirus is its ultimate test of unity. For many years, many people have wondered whether for the EU to remain unified there would need to be fiscal transfers from richer to poorer states. 

In this case, the question is about whether the issue should attempt to mitigate the crisis by issuing so-called coronabonds. However, rich states, like the Netherlands, Germany, Austria and Finland are opposed to the scheme because they feel that they are picking up the tab for less prudent members such as Italy and Spain. 

In many respects, it's a re-run of the debate over fiscal transfers from the core to the periphery that was a feature of the Greek crisis.