Debt sharing after Covid-19: how the direct involvement of EU institutions impacts the recovery path of a member state.

The substantial risk to public health posed by the emergence of Covid-19 has resulted in many European Governments taking unprecedented action to arrest the spread of the virus. Administrative closures across a number of economies has resulted in a complete cessation of certain types of economic activity, a significant increase in unemployment and likely profound consequences for the public finances of the countries in question. In this paper we use a recently developed DSGE model to estimate the impact of these closures on the Irish economy. We also examine the implications of a greater involvement by EU institutions in the sharing of sovereign debt on the recovery path of the Irish economy.