THOMAS MIROW: Chairman, German National Foundation, and former President, European Bank for Reconstruction and Development.

No doubt the decision taken by Europe's leaders in July 2020 to set up a European Recovery Fund of [euro]750 billion, financed by mutual debt, represents a historic step for the European Union.

It is, in the first place, a political milestone. Germany reversed its longstanding position and actively designed, in close cooperation with Macron's France and the European Commission, a powerful new solidarity tool. Chancellor Merkel understood that the pandemic had the potential to destroy the European Union through too-deep disappointment in Italy and Spain about the lack of solidarity when the virus hit them hardest, and too-devastating economic impact of the pandemic on their economies. So something big had to be done to convince the nations of southern Europe that the Union is to their advantage. With the decision taken after acrimonious debates on a four-day summit, the European Union proved its political will and capacity to act.

It is an economic milestone, too. The accelerating difference in growth and sound public finances between the North and South, exacerbated by the pandemic, is a lethal threat to European monetary union. It needs to be reversed, eventually.

Also, Europe will become a major player on financial markets. The volume of European bonds will come close to that of those placed by Italy, France, or Germany. For investors looking at "safe havens," a true European alternative to German bunds will be on offer. This should, very likely, also have repercussions for the role of the euro. Central banks all over the world, until now, have almost exclusively relied on the U.S. dollar for holding reserves. This may--gradually--change.

And finally, many private banks are currently sitting on huge amounts of bonds of...