Brussels has given the back of its hand. Germany, the Netherlands and Sweden remain the main opponents of the idea proposed by French President Emmanuel Macron. Yesterday, February 10, he again called for the creation of a “common debt capacity” (Eurobonds) to finance defense, artificial intelligence and environmental projects, arguing that without large-scale investments, Europe will lose out in competition with the United States and China.
Opponents’ arguments
“The EU should refrain from issuing general obligation debt to finance its defense spending. Countries should find the means to increase defense spending themselves, not do it together,” said, for example, Estonian MEP Riho Terras, commenting on the topic of a possible EU joint debt issue.
German Finance Minister Christian Lindner said that joint borrowing would not solve structural problems such as bureaucracy and that “European debt is not free.
The Dutch government, too, is considering a joint debt issue under the pandemic fund (NextGenerationEU) as a one-off action to be finalized in August 2026.
Hungary’s position is as oppositional as ever – Budapest continues to block alternative financing solutions that require the issuance of joint bonds.
Belgium, Bulgaria, Malta and Italy insist on continuing to search for alternative mechanisms that would comply with EU law.
The main division of opinion runs along a North-South line. Austria, Denmark and Sweden are also of the opinion that each state should be responsible for its own finances (no-bailout principle).
A compromise will have to be found
EU law effectively prohibits countries from assuming each other’s debts. Full-fledged Eurobonds would require a unanimous change in the EU treaties.
Economic risks are also traditional. Rich countries fear that their high credit ratings will suffer if they have to take on the debts of less fiscally disciplined neighbors.
Experts are leaning toward an interim solution. Instead of full-fledged bonds, the EU could introduce a €150 billion SAFE (Security Action for Europe) instrument – a credit facility whose funds are raised on the capital markets but distributed only to interested countries on the basis of national plans.
