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Abstract

In the field of Socially Responsible Investment (SRI), the European Union (EU) has played a leading role in recent years for its leading role in promoting green investments through the European Green Deal. Moreover, to mitigate the negative socioeconomic effects of the pandemic, the EU has become one of the main issuers of euro-denominated debt. In addition to issuing green bonds, under the European Recovery Fund program, it has issued, for the first time, social bonds to finance the unemployment protection program established in EU Regulation 2020/672. This paper analyzes green and social bonds aimed at financing the EU’s environmental and social programs, and compares them with conventional bonds from the same issuer, to determine if there is a difference in their performance that allows us to infer the existence of a green or social premium, as the case may be, and to try to explain it through a multiple linear regression analysis. While there is an abundance of studies in the scientific literature on the green premium, the same is not true for the social premium. Among the findings of this research, it is highlighted, on the one hand, that green and social bonds with higher levels of liquidity also exhibit higher yields, and on the other hand, that volatility implies that secondary market investors require higher rates. Additionally, social bonds have larger yield spreads compared to green bonds, suggesting that the social premium of bonds issued by the EU is wider than the green premium in the secondary market.

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Abstract

In the complex 1970s, Sweden’s majority trade unions and the ruling Social Democratic Party designed and presented an economic project that, had it been implemented, could have challenged the very foundations of capitalism in that country: the wage-earners funds. The project, in its original version, constituted a step towards the socialization of capital through the gradual transfer of the means of production and management power of enterprises to the workers.
This paper explains the history of this idea from the approach of the Marxist critique of political economy. The aim is to enrich the discussion by addressing four aspects: 1) the characteristics and the potential for relative radical economic, political and social change of the original project; 2) the subsequent political difficulties for its implementation derived from the rejection by capital and a fraction of social democracy itself; 3) the substantial differences between the original plan and the one that was finally implemented; 4) the actual functioning of the funds throughout the 1990s, their results and their final abolition.