(21 January 2020) – The EU’s internal market commissioner, Thierry Breton, suggests tapping into the ECB’s “easy money” and issuing long-term bonds of up to 50 years in order to unlock the €1,000 billion needed to finance the European Green Deal.
Breton suggests starting with the creation of very long-term bonds, “of 20, 30 or even 50 years, which would make it possible to take advantage of low or even negative interest rates”. According to him, these would be the most appropriate tools to finance the ecological transition.
“The mechanism could be de-consolidated at the level of debt,” Breton explained, saying this would allow green investments to be removed from the EU’s deficit calculation, because debt is initially issued by the member states.
The second part of Breton’s ideas for non-conventional finance is based on the Border Carbon Adjustment Mechanism, also known as the carbon border tax. The resources from this tax, which would apply to products from countries and regions that do not put a price on carbon emissions, will also be used to finance the transition. (EurActiv)