Europe’s experience in issuing supranational debt backed by sovereign states spans over seven decades. Despite the diversity of goals and structures, common borrowing initiatives have always adhered to strict boundaries: temporary issuance only to finance new spending in response to specific crises, no debt mutualization, no common Treasury with permanent fiscal capacity, and no transfer union.
This paper argues that today’s revolutionary geopolitical and macro-financial shifts require a reconsideration of at least some of these boundaries. In a world where the "new normal" consists of competition and confrontation with predatory superpowers, as well as frequent systemic shocks, joint borrowing could finance the European Public Goods (EPGs) essential for Europe's autonomy and resilience—doing so, for the first time, on a permanent and strategic basis.
We explain how a "coalition of the willing," open to future members, could make progress through ad hoc intergovernmental agreements, moving beyond the limits imposed by the Treaties while considering the broader context of common debt. Furthermore, we explore whether there is room—and under what conditions—for a partial replacement of national debt with new European instruments backed by joint-and-several guarantees, fostering financial market integration and the emergence of a true European "safe asset." To this end, a specific proposal is outlined.
Ultimately, progress toward a new generation of joint borrowing in Europe will depend not on legal architecture, but on political will, fiscal discipline, and mutual trust: a pragmatic path toward deeper European sovereignty.
Introductory remarks: Alberto Frascà Guest speaker: Ettore Dorrucci (former ECB manager) Closing remarks: Stefano Rossi (Secretary of MFE Torino)
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