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Illustration: Aïda Amer/Axios

Europe came one step closer to the long-held dream of fiscal union this week, as both France and Germany signed on to the idea of the EU itself — rather than member states — raising money on the bond market that could then be spent on crisis relief.

Flashback: In April, I praised a Spanish proposal that the EU issue €1.5 trillion in perpetual bonds and then give the proceeds to the member states most hurt by the pandemic. The problem was that while Spain would be a net winner from the scheme, none of the net losers seemed inclined to sign on.

Driving the news: The proposal from France and Germany is similar, if smaller, at €500 billion ($550 billion). Still, it would constitute an unprecedented transfer from Europe's richest countries to those most in need.

  • Reality check: All 27 EU member states, including fiscally hawkish nations like the Netherlands and Austria, would need to agree in order for this to become a reality. But up until now, Angela Merkel's Germany would also have been considered to be in that group.

What they're saying: "Ms. Merkel, in the twilight of her long political career, has put the interests of the 27-nation union" before her domestic concerns, writes Steven Erlanger of the New York Times.

The bottom line: The U.S. monetary union only works because it allows and accepts massive one-way fiscal flows from the rich states to the poorer ones. (New York Gov. Andrew Cuomo has had some choice words on that subject of late.) If the European monetary union is to succeed, similar flows between states are likely to be necessary.

Go deeper

Aug 12, 2020 - Technology

EU-U.S. privacy rift leaves businesses in disarray

Illustration: Eniola Odetunde/Axios

Some businesses fear growing liability while others worry that small and mid-sized firms will get hurt as the U.S. and Europe begin work to replace Privacy Shield, the pact that let thousands of firms transfer data across the Atlantic without breaking EU privacy rules.

Why it matters: Without a replacement in place after the EU's high court struck Privacy Shield down last month, thousands of businesses will be stuck complying with an agreement that no longer applies in the EU while scrambling to figure out how to get data over from Europe without exposing themselves to legal risks.

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Coronavirus may have been in U.S. in December 2019, study finds — Hospital crisis deepens as holiday season nears.
  2. Politics: Bipartisan group of senators unveil $908 billion COVID stimulus proposalFDA chief was called to West Wing to explain why agency hasn't moved faster on vaccine — The words that actually persuade people on the pandemic
  3. Vaccine: Moderna to file for FDA emergency use authorizationVaccinating rural America won't be easy — Being last in the vaccine queue is young people's next big COVID test.
  4. States: Cuomo orders emergency hospital protocols as New York's COVID capacity dwindles.
  5. World: European regulators to assess first COVID-19 vaccine by Dec. 29
  6. 🎧 Podcast: The state of play of the top vaccines.

Bipartisan group of senators unveils $908 billion COVID stimulus proposal

Sens. Joe Manchin (D-W.Va.) and Susan Collins (R-Maine) in the Capitol in 2018. Photo: Tom Williams/CQ Roll Call

A bipartisan group of senators on Tuesday proposed a $908 billion coronavirus stimulus package, in one of the few concrete steps toward COVID relief made by Congress in several months.

Why it matters: Recent data shows that the economic recovery is floundering as coronavirus cases surge and hospitals threaten to be overwhelmed heading into what is likely to be a grim winter.