Is cancelling debt the right thing to do?

Faced with a pandemic that sent debt levels to unprecedented heights, the eurozone has launched a consultation process to revise rules hitherto seen as sacrosanct, particularly among fiscally frugal northern members. However, the idea of overhauling the debt ceiling still faces an uphill task to be adopted. “It’s a politically ‘feel-good’ measure, but it would change neither the existing level of debt nor the fact that interest rates have to remain low for it to be sustainable,” said Rui Soares,
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