Europe should issue perpetual bonds to tide over the Coronavirus economic crisis, a suggestion by billionaire investor George Soros

Brussels: – Billionaire investor George Soros has suggested that Europe should issue bonds in the category of perpetual bonds to avoid the economic recession that could be caused by the Coronavirus pandemic. Last week, Germany and France, the leading countries in Europe, announced a fund of 500 billion Euro to avert the economic hit because of the Coronavirus pandemic. Speaking in this reference with a Dutch magazine, Soros expressed an opinion that bonds should be issued instead of the special funding package.

In a recent interview with a British daily, Soros had said that the Coronavirus Pandemic could see the end of European Union. Billionaire investor George Soros claimed that the European Union is deficient even today as a united group. At the same time, the stress is on rules and regulations. The cycle based on law and justice is very slow. But compared to that, the Coronavirus pandemic is spreading at express speed, and Europe will fail in facing the pandemic, and this will result in the end of the European Union.

Two million people have been infected with Coronavirus in Europe, and out of these, nearly 173,000 patients have succumbed to the disease. The pandemic has played havoc in the United Kingdom, Italy, Spain, France and Germany. The economic aftermath of the pandemic is also becoming apparent, and most of the leading groups and institutions have predicted a severe recession in Europe. Germany, the leading economy of Europe, has already declared a recession.

A special fund was announced last week to bring the European economy back on track. The German and French heads of state, while announcing this fund named Recovery Fund during a meeting held via videoconferencing, said that under this, grants could be given to various countries in Europe. But some of the European countries have opposed the proposal and have demanded that the funds should be given only on a loan basis. The European Union will be presenting a final proposal in this respect, and the suggestion made by George Soros becomes important in that context.

Billionaire investor George Soros, during an interview with the daily Der Telegraph in the Netherlands, said that bonds similar to the ones issued by the United States and the United Kingdom in the past should be issued by Europe. The unique feature of these bonds, also known as PERP or CONSOL bonds, is that the date of maturity is not prescribed for these bonds. The only obligation in such bonds is to pay the interest every year.

During his interview with the Dutch daily, investor George Soros suggested that the European Union should issue perpetual bonds worth one trillion Euros. If the bonds carry an interest rate of 0.5%, the total interest pay-out will be 5 billion Euros. The scheme for issuance of the bonds need not be one time, it can very well be staggered, and many people interested in long-term investment can benefit from this.

It is revealed that the United States and the United Kingdom have made use of perpetual bonds in the past. The United Kingdom had used these bonds during the war with French Emperor Napoleon and also during the Crimean war and the First World War. Whereas, the United States had used these bonds in the 1870 decade during the Civil War.

The European Union will be presenting the final proposal regarding the Recovery Fund. The differences among the European countries have already surfaced before that. In this scenario, the suggestion made by billionaire investor George Soros could intensify the differences.

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