Common borrowing was first used by the EU to help countries pay for the recovery from the coronavirus pandemic. But then, as now, countries such as the Netherlands, Germany and the Nordics resented having to pay for poorer southern countries that they see as lacking fiscal discipline.
Buying foreign assets is devastating for the poor countries though as their capital and the capital returns are now in the hands of the already rich countries. And with assets like simple homes already out of reach, pushing down wages only makes things worse.
No matter how you play it. If you want a single market with a single currency, you must put the effort to balance trade and strengthen the weaker economies. Otherwise it will become lopsided time and time again.
Foreign assets must be outside the Euro zone to devalue the Euro. It still devastates countries but not EU countries.
For the devaluation to work right now, we must already do that. My guess is that it’s poor countries buying stuff from China. In that light, fiscal discipline could mean less stuff from China as a preparation for decoupling. But that cannot work because if people have less money they cannot buy expensive stuff from the EU.
Do people ever hold those assets? Don’t they just wander from one set of billionaires to another?
The big picture is that fewer global resources are spread among more people. People are inevitably becoming poorer unless they count their immaterial goods, their movie, music and gaming libraries.
We have to redesign cities for that. Better sooner than later as long as we have some resources.