Frankfurt – We’re friends! And among friends you stick together when there are problems, right? Many countries in Europe are currently thinking that. The problem for these countries is the corona virus. The virus not only damages the health of many people, it also costs a lot of money. Because companies can sell less than normal and get into trouble. That is why the countries want to help them with money. Could the countries in Europe come together? Corona bonds are often mentioned at the moment.
But what are such bonds actually? States like Germany often borrow money. You also pay something extra on top. This extra money is called interest. Germany, for example, pays little interest because people are sure that they will get their money back later. Other countries that are not doing so well have to pay more interest. If there were common bonds in Europe, the interest rates would be the same for all participating countries.
All countries in Europe are affected by the corona virus. Corona bonds could also be used to cheaply borrow countries that would otherwise have to pay much more. Countries like France and Italy are in favor of such corona bonds. Germany, for example, is against it. It is worried that some of the money problems of other countries will have to be paid later, and points to other options.