Is it possible to cancel Covid debt without harming creditors?

DECRYPTION – This is a very attractive idea: the European Central Bank carries in its balance sheet nearly a quarter of French public debt, among others. However, the ECB’s sole shareholders are the states of the euro zone. To erase this debt is a white operation …

Nothing new under the sun: wanting to cancel your debts is an ancestral wish and constitutive of our culture. “Forgive us our debts, as we also forgive our debtors,” says the Gospel of St. Matthew. Conversely, the popular adage, common to most European countries, takes the opposite view: “Whoever pays his debts gets richer.”

These two opposing attitudes like day and night encamp the intense debate in which economists, financiers and politicians clash today over the possibility of erasing the “Covid debt”. Public debt means only that linked to the pandemic, and exclusively securities held by the ECB. The stakes are high: to date France has had to borrow an additional 200 billion euros last year just because of the virus, which has not said its last word. To be relatively technical, the discussions are heated and, on both sides, we exchange names of birds.

“To cancel

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