Buying public debt to support investing in Europe’s future
With access to credit remaining squeezed, central banks and governments are now being urged to buy up corporate debt in order to avert bankruptcies. Whereas the European Trade Union Confederation (ETUC) recognises the need to restore credit flows in financial markets, it is also fearful of ill-designed measures. Such measures would bail out private sector mismanagement at a high cost for public finances while failing to produce economic recovery.
ETUC therefore urges European policymakers to prioritise policies which provide economic stimulus and create new sustainable jobs. The European Central Bank (ECB) and other central banks need to start buying public debts backing European investment projects in the areas of clean and renewable energies, European infrastructure and networks, modern cars and new transportation systems.
Says Reiner Hoffmann, ETUC Deputy General Secretary: ‘The priority should be to mobilise scarce public resources to get us out of the crisis, not to bail out companies which in some cases have undercapitalised themselves by paying their shareholders significant capital and dividends back in recent years’.
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