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More than 100 economists want to cancel public debts held by the ECB

More than 100 economists are launching a call to cancel public debts held by the European Central Bank (ECB), Friday February 5, in order to facilitate social and ecological reconstruction after the Covid-19 pandemic. While public debt has risen sharply to protect households and businesses, “citizens are discovering, some with dismay, that nearly 25% of European public debt is now held by their central bank”, note these economists in a forum intended for nine European publications, of which AFP has obtained a copy.

We owe 25% of our debt to ourselves.

Collective of more than 100 economists

in a call

“Si we reimburse this amount “, explains the text, “We will have to find it elsewhere, either by borrowing again to roll the debt instead of borrowing to invest, or by raising taxes or cutting spending.” Some 50 French people are among the signatories, including Thomas Piketty (Paris School of Economics), Jézabel Couppey-Soubeyran (Sorbonne), Olivier Passet (Xerfi) and Aurore Lalucq, who is also a Member of the European Parliament (Socialists and Democrats group).

They remind that “these amounts now amount to nearly 2.5 trillion euros for the whole of Europe”, in their call to appear in particular in The world (France), El Pais (Spain), La Libre Belgique, Der Freitag (Germany) and the futuree (Italy). But for the ECB, canceling government debts, which are currently being traded at very low or even negative rates, is not “not an option”, because “citizens would risk losing confidence in the currency”, declared in June Fabio Panetta, Italian member of its board.

[Il s’agit d’]offer European states the means for their ecological reconstruction, but also to repair the social, economic and cultural damage.

Collective of more than 100 economists

in a call

The signatories are already imagining an exchange. On the one hand, the cancellation of public debts or their transformation into perpetual interest-free debts. On the other hand, a commitment by States to “invest the same amounts in ecological and social reconstruction”. The signatories claim that “cancellation is not explicitly prohibited by the European treaties” and “history has shown us time and time again that legal difficulties disappear before political agreements”.

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