Perpetuities, provided they were at a low rate of interest, would prevent the need for fiscal tightening. This would benefit the economy most as it struggles to recover. As with the consoles issued to pay for the Napoleonic war, governments could redeem the debt if interest payments were proving too costly. An alternative is long term debt. This has similar benefits. Over time inflation would erode the debt burden and act as a tax. Bond holders would then, in effect, be financing the current large, but temporary, fiscal deficit. This seems the optimal inter-temporal solution.

I vote "other" because, apart from rejecting the first option, I believe that any of the others could work. In general, as covid-19 is a one-off fiscal problem it should be financed either by bonds or money. In principle a temporary increase in taxes could also be used. Bonds would be financed by the current generation and money would be a temporary inflation tax. General taxation is only appropriate for permanent increases in fiscal deficits. However, in the EU this solution would be difficult to implement due to the single currency. Countries such as Germany and The Netherlands can use bond finance but countries like Italy, Greece and Spain would find this very expensive due to their already high levels of debt. Currently money financing is ruled out for the ECB as they are not allowed to buy government debt directly. As direct fiscal transfers are too small and face strong opposition by the countries that expect to have to pay, and higher temporary taxes would be politically difficult, this only leaves bond financing. This could be done by reducing the cost of debt by debt write-offs and then issuing more debt or by risk sharing through coronabonds. Both face the objection that they are a form of fiscal transfer. In principle any of these or a combination could work. The choice of which to use will be political and not economic. The founding fathers of the EU might take some satisfaction from the situation as whichever solution is adopted it will hasten their ultimate objective of political union. Participants have admitted that monetary union was introduced before it was sensible in order to hasten political union. Now fiscal transfers will break the log jam of fiscal union and be a further push to political union.