The EU met with huge demand for an issue of new coronavirus-related bonds on Tuesday, with bankers saying the sale had received the largest ever order book in global bond markets. The deal forms the start of a borrowing binge that will make Brussels one of the region’s biggest debt issuers. Investors placed bids for more than €233bn, far exceeding the €17bn of bonds on offer, according to one of the banks arranging the deal. Buyers were drawn by the relatively high yields on the bonds, which came with 10-year and 20-year maturities, and offered more income for investors than the eurozone’s safest government debt. The sale is the first under the EU’s €100bn SURE programme, which will provide loans to support member states’ efforts to keep workers in jobs during the pandemic. Brussels will ramp up its debt issuance next year as it funds the larger €750bn coronavirus recovery package agreed in July.
Atlantic Dawn wrote: » They should borrow €50billion more and use it exclusively for majoy infrastucture projects.
mcsean2163 wrote: » We're already the third most indebted nation per capita in the world. Any thoughts to what would happen if when the debt has to be paid, the interest rates were higher, e.g. 5%. and government revenues were lower.
"Inflation remains far below the aim and there has been only partial progress in combating the negative impact of the pandemic on projected inflation dynamics," Professor Lane said in a blog post. "It should be abundantly clear that there is no room for complacency," he stated.
Geuze wrote: » Where would we find the builders? The problem isn't really a lack of finance, it's a lack of skilled staff.
Harry Palmr wrote: » If money is for growth and not current spending (thought it is right now obviously) then it's not a problem, an economy that's well run and invests well in education and future tech infrastructure will easily be able to keep up the payments.
mcsean2163 wrote: » Just heard Stephen Donnelly saying we're going to keep spending as long as it takes. Gross national debt at €223 billion now.https://www.ntma.ie/business-areas/funding-and-debt-management/statistics What's the the figure that causes us to go bust?
Arthur Daley wrote: » 'This time it's different......'
beachhead wrote: » Irish National Debt is 203,323,506,700 according to worldebtclocks.com
rossie1977 wrote: » If you were making €90k a year a €200k mortgage wouldn't be that excessive. The US brings in about $3.5 trillion a year and their national debt is $27 trillion
Brussels Sprout wrote: » Well you have to ask yourself the question, why would the interest rates be higher? Typically Central Banks increase interest rates in order to make borrowing money more expensive which in turn is to take the heat out of a rapidly growing economy. This is to protect against the effects of inflation. By all accounts the bigger concern right now is actually the polar opposite problem - deflation. Think about that. in 2008 inflation was at the target rate of 2% and the ECB base interest rate was at 4%. Inflation hasn't hit 2% since. At first they dropped the base rate to 1% and eventually 0%. That didn't make inflation hit 2%. In addition to that they've literally been pumping money into the system for the last 8 years and the current rate of inflation in the Eurozone is actually negative. I guess what I'm saying is that there is no pathway to the exact scenario that you have outlined above from where we are at presently, which is precisely why the likes of Philip Lane at the ECB are more concerned about deflation right now. Translation: "We're not stopping the printing presses anytime soon"link
mcsean2163 wrote: » I was reading a while back that the fiscally conservative more Eastern eu countries will not tolerate the current circumstances forever. Not to mention that rewarding reckless spending and punishing nations with balanced budgets sounds crazy. Imagine if you work hard and pay your bills while your neighbour sits around doing nothing borrowing borrowing year after year. You say stuff like hard work is its own reward and someday they'll have to pay but they never pay. There's either justice or a corruption of the industrious. If justice, then we're in for a serious reckoning, if the later the EU as a whole is in big trouble.
Brussels Sprout wrote: » Ask yourself the question - What finally ended the EuroZone crisis? Or how about - How was it that post-crash unemployment peaked in the USA in 2010 but it didn't peak in Greece, Spain, Portugal, Ireland or Italy until 2014? The answer to the first question is not Austerity. The answer to the second question is that the Fed starting buying bonds in November 2008. The ECB didn't start until 2012. Are people advocating that we go on a suicide mission of trying to balance our massive current account shortfall through austerity for fear of taking on additional debt at this time? I'd argue that that would be a deliberate act of self-harm made all the more futile by the record low cost of borrowing money.This time it's not different. We all need to learn from the mistakes of the last recovery and not try and pull ourselves up by our bootstraps needlessly deepening and extending a recession.
Arthur Daley wrote: » Cutting spending to reflect the lower tax base is not austerity. So called right wing or conservative politicians would recognise as Thatcher had to in the late 70s that we can't keep going on like this. Cutting your cloth to suit your purse is called common sense, not austerity. Not getting perennial pay rises and cutting your sky sports subscription is not austerity. Building up from the second world war with cities flattened and making the sacrifices to generate real wealth for investment, or the hunger and unemployment of the 1930s, that was austerity.
Brussels Sprout wrote: » Ok. What would you cut to make up the (at least) €21 Billion hole in the budget this year? Here are sample outlays to put that figure into perspective:Budget of the Department of Education and Skills: €11 Billion Total Public Pension cost €7.7 Billion (2018 figure) Budget of the Department of Transport: €3.5 Billion
Arthur Daley wrote: » We pay highly paid civil servants and politicians to fullfill this role. Not some random punter on a discussion forum. So I won't be going down this particular cul de sac thanks.
Brussels Sprout wrote: » I have 3 question for you:Who has been spending recklessly? Who's going to balance their budget this year? What's your alternative solution?
