OTMAR ISSING: President, Center for Financial Studies, Goethe University Frankfurt, and Founding Member of the Executive Board, European Central Bank.

According to Jean Monnet, Europe always needs a crisis to make an important step forward. On the one hand, European integration is based on a grand political design. On the other hand, progress in political reality can only be achieved and the manifold obstacles overcome under the pressure of a crisis. Following the motto "never let a crisis to go waste," Covid-19 seems to deliver a perfect case to go ahead. Politicians, among them the German finance minister, and academics, identify a Hamiltonian moment for Europe. This reference is based on two elements comparable with the situation of 1790 in the United States: an exogenous symmetric shock, with asymmetric impact. EU countries with already high public debt before the crisis would run into great difficulties in financing the measures needed to stabilize their economies. Alexander Hamilton interpreted the assuming of states' debt accumulated during the War of Independence as "cement" for the Union.

The opportunity of an Hamiltonian Moment for Europe means to mutualize new debt at the EU level to deal with the economic consequences of the pandemic and provide the financial means to the countries most seriously hit by the crisis. Shouldn't the European Union follow the U.S. example and move in the direction of fiscal and political union?

Indeed, the European Union has broken a taboo. It will raise a large amount of debt ([euro]750 billion) for which there will be a common liability of member states, and distribute the financial means to countries partly as transfers and partly as credits. In addition, own revenues for the European Union via European taxes are planned. Will the political ambition end in a fiscal and finally political union?

"Hamiltonian moment" is a nice catchword (see my article "The COVID-19 crisis: A Hamilton Moment for the...