The EU's debt bondage expansion

In the global market for government debt, worth an estimated $92 trillion (£66 trillion), it amounts to little more than a drop in the ocean. The European Union this week issued the first €20 billion (£17 billion) of bonds to pay for its Coronavirus Rescue Fund. The money itself doesn’t amount to very much one way or another. And yet, the Commission’s President Ursula von der Leyen was surely right when she described it as a ‘truly historic day’. Why? Because, the Commission is already using it to seize control of fiscal policy, just as it used vaccine procurement to take control of health policy.

Its enthusiasts have already hailed the fund as the EU’s ‘Hamilton moment’, in a reference to the first treasury secretary of the United States, who issued bonds on behalf of the fledgling nation — both as a way of accessing some cash but also, and perhaps more importantly, as a way of binding the states together as a single country.