In March 2020, nine EU heads of state co-signed a letter demanding a coordinated response to the pandemic and the adoption of common debt. Recent literature has shown the relevance of the European Council in the response to the pandemic, as well as the rising importance of interstate coalitions in EU policymaking. Yet, empirical understanding of these coalitions is limited, and the literature largely assumes their constitution along ‘structuralist’ logics (e.g., ‘debtors’ vs. ‘creditors’). The emergence of a ‘solidarity coalition’ proposing the ‘coronabond’ is puzzling for its contrast with the euro crisis. The aim of this paper is to explain how these countries coalesced and to understand how that relates and informs a shift in the imperatives of ‘responsible government’ in the EU. Tracing the negotiation of the letter, through interviews and discourse analysis, the paper makes a critical contribution to our understanding of the evolution in EU economic governance.

With the current sovereign debt crisis, the incompleteness of economic integration in the Economic and Monetary Union (EMU) has become patent, leading to an intense debate among academics and policy makers. Much of the debate concerns fiscal rules and austerity measures, both of which weigh on growth prospects. In this paper we look at the main structural shortcomings of EMU through the lens of general equilibrium theory. We address two issues (international sharing of macroeconomic risks and coordinated growth stimulation) which are at the heart of the sustainability of EMU. We propose: (A) a specific scheme for mutual insurance of macroeconomic risks; (B) locating responsibility for demand policies at the EMU level, with ambitious investment programs (public, or fiscally-neutral private) as main instrument.