It is not clear whether this means that the MFF should be subordinated to the objectives of the perpetual bond issue, or the perpetual bond issue should be subordinated to the MFF. Given the difficulties of agreeing on the MFF, if the latter interpretation is correct, the perpetual bonds may be issued too late or never.
The non-paper states that the “transfer of funds should be frontloaded,” beginning on January 1, 2021, “and be executed during the coming 2 to 3 years in order to jump-start the economies of affected countries.” This seems to indicate that the first interpretation is correct. Nevertheless, greater clarity would be highly desirable.
My other observation relates to Italy, where public opinion is moving toward leaving the euro and the EU. What remains of Europe without Italy? That question underscores the importance of using perpetual bonds – and should induce the European Council to move even faster than it is currently contemplating.
George Soros is chairman of Soros Fund Management and chairman of the Open Society Foundations. A pioneer of the hedge-fund industry, he is the author of many books, including "The Alchemy of Finance, The New Paradigm for Financial Markets: The Credit Crisis of 2008" and "What it Means, and The Tragedy of the European Union."