Tue. May 24th, 2022

In “Brussels struggles to bridge EU budget reform gap” (Report, 13 January) Johannes Hahn, EU Human Resources and Budget Commissioner, is quoted as saying: “I do not support any ideas to exclude certain types of debt, to qualify them as good, sustainable, green, etc. of the day, debt is debt. ” He implies that all debt is bad debt.

That mantra has prevailed for too long in some EU countries, such as Germany, the EU’s de facto leader, to the point that essential investment in infrastructure and schools – and even repairs – has been abandoned. As a result, China, with its massive investments, has outpaced all EU countries and is now the second largest economy in the world.

Such investment spending – some financed with debt and some dating back to the 1800s – provided a return on investment that continues to this day, as those assets provided the foundation for economic growth and the well-being that citizens still enjoy.

Today, because debt is not categorized separately as investment and operating expenditure, much of the debt incurred by EU member states goes to pay for large, unproductive bureaucracies, including those in Brussels. The time is long gone to bring transparency into that spending. Perhaps this will lead to Hahn’s work and department being made redundant.

The savings can be transferred to investments that will pay off the debt “at the end of the day”.

James Hanshaw
Zurich, Switzerland

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