Can the Borrowing for the 'Next Generation EU' Lead to Infringement of Article 125 TFEU?

The Next Generation EU programme is both ambitious and controversial. Legal scholars have disagreed on whether the EU (European Union) may borrow large amounts for long periods, whether the chosen legal bases in the Treaties are correct and whether art.125 TFEU may be infringed. This article examines three possible routes by which art.125 TFEU may be infringed: Member States assume the liabilities of the EU in case of EU default; Member States assume indirectly the liabilities of other Member States in case of EU default; Member States assume directly the liabilities of other Member States in case one or more Member States default. The article argues that the risk of default of the EU is non-significant. The assumption of the EU's liabilities by Member States is not prohibited by art.125 TFEU. More importantly, there is no automatic mechanism by which default of a Member State will lead to the assumption of its liabilities by other Member States. However, Member States can provide mutual assistance, if they wish, without formally assuming the debt liabilities of another Member State.