In an interview with Euronews, EU Commissioner for defence and Space Andrius Kubilius stated that the EU is not yet prepared to issue so-called Eurobonds to increase critical defence capacities to ward off any possible military strike against the bloc.
The previous prime minister of Lithuania stated, “Eurobonds mean that the European Union will have a bigger debt that will need to be serviced again by all the member states. Now we have a challenge on how to repay the existing debt.
He continued, “The fact that we are getting ready to talk about the next Multiannual Financial Framework (long-term EU budget) clearly indicates that, should we not come up with another solution, a significant portion of the next MFF will be used to pay back pandemic debt.
One percent of the bloc’s GDP, or about €1.2 trillion, is allocated to the EU’s long-term budget. The EU’s debt repayments from funds given in response to the Covid-19 outbreak are anticipated to total between €25 billion and €30 billion a year, or up to 20% of the bloc’s yearly cash flow.
Since the EU has not yet resolved how to pay back the debt accumulated for pandemic-related recovery funding, Kubilius stated that he expected member states to employ the tools and solutions already suggested under the “rearm Europe” plan, now renamed as “Readiness 2030.”
The Commissioner contended that we shouldn’t issue bonds until we have those answers because, ultimately, someone will have to pay large sums of money regardless of the vehicle you use—loans or bonds (grants).
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