I understand why the German government (alongside Austria Finland and the Dutch) rejected to look into Corona Bonds/Euro Bonds and favors the ESM. However, the ESM is highly likely to cause a new wave of austerity in the southern member states of the EU creating yet another lost decade for economic and social development of the European Union as a whole.
This crisis is unlike any other crisis in recent history. It combines multiple risks, including financial instability, migration, and authoritarianism. Consequently, any response requires greater European solidarity, which has been fundamentally absent so far.
The purpose of Corona Bonds is not an act of charity for the weaker member states, but it is to ensure that Europe as a whole emerges from this crisis stronger and readier to meet the many other challenges that have been put on hold.
Economists have proposed a volume of 1,000 bn Euros with a long maturity. One part of the financing volume would serve all member states that provide effective relief to this crisis (Germany would benefit as well). The other part would be made available to individual member states to finance common European projects such as establishing a network for the production and distribution of essential equipment. Financing lines could also include investments in hospital infrastructure, as well as reindustrialization strategies, survival funds for small businesses and crucial infrastructure. Each member state would be held accountable for a share of the principal and interest repayment of the Corona Bonds in accordance to their GDP based contributions to the EU budget.
Corona bonds are needed to preserve the postwar European welfare state model, and they are feasible.