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EU recovery fund ‘not a threat to sovereignty’

February 4th, 2021

A former vice-president of the Hungarian National Bank dismisses the suggestion that the 750 billion euro coronavirus recovery fund marks the federalization of the European Union.

On Portfolio, former National Bank Vice-President György Szapáry deems it far-fetched to call the EU’s 750 billion euro recovery fund Europe’s ‘Hamiltonian moment’. Szapáry acknowledges that the recovery plan and the creation of collective debt is an important milestone in the history of the EU. But he dismisses any suggestion that it is akin to the mutualisation of foreign debt after the American War of Independence that kick-started the federalization of USA. The collective debt of the EU will remain very low, and the EU did not mutualise those debts taken before the recovery fund deal, Szapáry notes. The recovery fund at this point rather resembles President Roosevelt’s New Deal programme (enacted between 1933 and 1939) than the mutualization of US debt and the de facto fiscal federalization of the US, Szapáry believes.


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