The Background of EU Bonds and Joint and Several Liability

During the Eurozone debt crisis, there was a debate about issuing mutualized debt instruments that carried either joint and several guarantees of the member states or several guarantees. However, resistance from countries like Germany hindered the adoption of these instruments. Recently, the European Commission has approved a recovery program to finance COVID amelioration, raising questions about the legal character of these bonds. The Commission claims that the proceeds will be lent to member countries, and they assume that the bonds will be paid in full. Additionally, they state that there are options to cover deficiencies through reallocation of budget funds or calling upon member states. However, they do not provide a clear answer regarding joint and several liability.