These governments believe that no one will put an end to the monetization, because ending this mechanism would trigger a sovereign debt default, whichwould harm the other eurozone governments

These governments believe that no one will put an end to the monetization, because ending this mechanism would trigger a sovereign debt default, whichwould harm the other eurozone governments

These governments believe that nobody will end monetization because the end of this mechanism would trigger a default of sovereign debt, whichwould interfere with other governments in the euro area. With this monetization, governments can externalize the costs of its deficit in part on citizens of other countries in the euro area as a lower purchasing power for the euro. It may not be surprising that most governments have ignored TheNew treaty established following the crisis of the European debt tobring debts and deficits. Government deficits and surpluses as a percentage of GDP public debt as percentage of GDP During the Covid 19 locks and panic resulting, Italy, Spain, andFrance demanded vehemently solidarity of Germany bluffing about leavingthe EU if their demands went unheeded. These users are the governments of the euro area. Unfortunately, the moral hazard implicit in euro not only influenced configuration excessive public spending before the crisis crown, but most likely to influence government responses to the epidemic as well. European banks, especially the ECB are loaded with government bonds of the euro area. when there was a different day of the crisis, these governments simply print more government bonds, banks have their buy and others to pay as a loss of euro purchasing power . The crisis Covid 19 driving the EU to the Brink by Philipp Bagus Authored by the Mises Institute, the euro area is a gigantic monetaryredistribution machine. A government default would imply losses not only in the offending country, but for all banks in the euro area. Although Southern governments like Italy, France and Spain has not used in recent years to reduce their deficits, Germany and other northern countries, like the Netherlands reduce their debts , thereby increasing, ironically, the possibility of South Government building on Germany and the north for bailouts. Thus, the introduction of the euro may be responsible forsuicidal closures in some countries in the euro area will be more than in other places with all their social, political, health and economic harm. But if a government can outsource part of lockdown costs on others through new debt or bailout? If that possibility exists, as in the euro zone, it becomes more likely that a government declarea and lockdown ContinueWith for longer. By running relatively higher than their peers deficits, the eurozone governments can try to live at the expense of foreigners. Instead lift the restrictions as soon as possible, South governments to maintain, becausethey count on a bailout and the support of governments tax accounts better. consider Several independent governments can finance their spending by the deficits are monetized directly or indirectly by a printing press. Specifically, the European Central Bank (ECB) may buy government bonds of the euro area directly from the market participants or accept as collateral in its lending operations, more and more effective in the monetary base. Despite their inability to reduce public spending and deficits in good times, they believe it is their right to be bailed out. Ruining their own economies, governments in the South actually increase the pressure of the institution of new redistribution systems, and finally a European superstate. The costs of closures and government bailouts of citizens and companies are enormous. In the last years of moderate economic growth, interest rates to virtually zero, highly indebted governments have not taken advantage of the situation to reduce their debts. The configuration looks atragedy of Commons. Governments think they will get away with it. A government must carefully consider the decision to execute an expensive lock. And it is possible that this crisis will lead to a final decision for the future of the euro and towarda European superstate. The ECB announced that it buy750 billion in bonds, and the EU agreed billionbailout A540 package. Instead, they took advantage of higher tax revenue and reduce expenses of interest to public spending boost in other areas. The reasoning, as evidenced Greece infamous former finance ministerYanis Varoufakis is. Their latest excessive deficit can be explained by the prospect of the European debt mutualisation. if you do not save us, we will default, leading to aEuropean banking crisis, significant losses for the ECB, and severe depression. It would lead to cascading failures, a huge bank, sovereign debt and economic crisis