How European bonds are helping the pandemic recovery

European Central Bank President Christine Lagarde talks to European Commissioner for Economy Paolo Gentiloni, and German Finance Minister Olaf Scholz, during a meeting of Eurogroup Finance Ministers at the European Council building in Luxembourg, Luxembourg June 17. Reuters

Europe has begun to take key steps on its chosen post-pandemic path by raising the first 20 billion-euro tranche for a Covid-19 recovery fund. That may sound worthy and somewhat dull but it is neither. The EU’s largest ever joint issuance of debt has stoked ambition and optimism among member states on a scale not seen since the creation of a European single market more than half-a-century ago.

Consider this: an Italian minister harks back to the 800km of highway built between Milan and Naples in less than a decade in the 1950s and says the new money could “once again enable Italy to become an example to the world”. Spain’s prime minister Pedro Sanchez declares that the transformational effect of the imminent grants a…