FXStreet reports that Thomas Harr, PhD, Global Head of FI&C Research at Danske bank, discusses risk sharing and fiscal dominance in the Eurozone, the embracement of Modern Monetary Theory (MMT) and the next euro crisis.

"The skyrocketing government debt in several Eurozone countries in the coming years and the lack of risk sharing require monetary financing. Luckily, the ECB is delivering just that."

"We have shifted to fiscal dominance in the Eurozone from monetary dominance. Fiscal dominance and monetary financing are closely related to the concept of MMT, the idea that countries, which have their own currency, may just print money to finance deficits. The COVID-19 crisis is a real world experiment of MMT in the Eurozone and elsewhere."

"In the long run, monetary financing and MMT would lead to high inflation. However, I do not think we will reach that point, as the ECB would likely scale down its monetary financing before inflation gets out of control. The end of monetary financing in the Eurozone could kick-start the next euro crisis."