MERRYN SOMERSET WEBB: Editor-in-Chief, MoneyWeek.

If your dream is a United States of Europe, you may not much mind a crisis: it is usually one of these that prompts a new step towards EU integration. So it is with Covid. The strict lockdowns most EU governments adopted as their main pandemic policy have created economic carnage across the continent.

The European Central Bank has done its bit--but also asked and asked for a dose of fiscal intervention as well. The Commission has delivered; its latest seven-year budget is to be bumped up with a [euro]750 billion Next Generation EU Fund to help the worst-affected countries.

This comes with three interesting bits. The first is that [euro]390 billion of the cash is to be distributed as grants, not loans--usually the European Union likes to pretend that it is not in the business of fiscally transferring between rich and poor EU members by dressing transfers up as loans.

The second is that the cash is to be directly borrowed by the Commission with the issue of new bonds with various maturities from three years up (extending to 2058) and guaranteed by its own revenues. Previously, Eurobonds have been jointly guaranteed by the EU countries.

The third relates to the second--if the Commission is to guarantee payback from its own revenues (known as "own resources" in EU speak), it's going to have to bump them up. Right now the Commission gets a smallish flow of cash from the EU countries in the form of customs revenues and a percentage of each country's VAT revenues. That's not enough--so the new deal comes with a new ability for the Commission to raise own resources via new taxes (on digital activities and carbon, for example).

This is all-important. It means the Commission will no longer be just a middle man between national tax revenues and EU spending. It can leverage its own budget with common debt. It also means that it can directly subsidize countries for the first time. Neither of these things could have happened (indeed been imagined outside the minds of fanatics) this time...