The biggest geopolitical impact of corona c/d be in Europe.

The fight over coronabonds is about the EU getting its act together. Word of a compromise was met w/ cheers. But the deal punted on THE issue - eurobonds. Now the populists are ready to pounce. https://www.ft.com/content/f77dad8b-2827-4719-81da-3afaab1162ed?shareType=nongift

Italy is a founding member of the EU and its 3rd largest economy. They have not experienced economic growth in its 20 years w/ the euro. They bore the brunt of the migration crisis. They enacted rigid austerity. They went through govts. Attitudes toward the EU have now cratered.

The demand for Coronabonds isn’t symbolic it gets to the heart of whether Italy can respond with economic force to this crisis. Right now if they do that their debt ratio will sky rocket, interest rates will rise. Think UK post WWII. They are screwing themselves long term...

Since Italy doesn’t have their own currency, they can’t print money like the US can. They need the ECB to do that and they need fiscal stimulus support from the EU.

They (and others) need the EU to act. But northern states, led by economically conservative governments in the Netherlands and Germany don’t. Hence Europe remains stuck. It’s had a lost decade. Weak econ growth, no reform, a populist resurgence, and geopolitical decline.

So by not acting boldly, Merkel and others are laying the groundwork for a political disaster. They are handing oxygen to the anti-EU far right populists... and to make matters worse... they have a point!

The EU is far far more durable than given credit for. But it has been battered by crisis after after crisis. This is now it’s toughest test and it looks like it will once again try half measures and to muddle through. That really may not be enough this time.