The economic damage of a brexit would be much worse than predicted in most mainstream studies before.
Germany and France have proposed a European Recovery Fund of € 500 bn based on large loans taken out by the EU to be transferred exclusively as grants to EU member states particularly affected by the corona crisis. The legal construction still has to be sufficiently clarified and, due to the resistance of some EU countries (Frugal Four), implementation in the proposed form does not appear certain.
The current crisis is different from the situation 2008/2009, but again it is a tremendous challenge for the economies across Europe. The Corona-crisis is hitting the economies symmetrically, though with differences in magnitude levels, while the 2009 crisis was primarily a crisis of the banking industry and the manufacturing sector.
Various European instruments for countries particularly affected by the Corona crisis are currently under discussion. In this article several requirements will be established and the existing proposals will be measured against them. The instrument of Corona bonds is considered most effective – provided that German policymakers accept the risk-sharing associated with them.