Financial Insights – March 2013

| Point of View

Various efforts have been made in recent years to devise a new institutional framework for the eurozone, principally to guarantee a stable future for the euro. Eurobonds are not formally part of the new arsenal, but a degree of sovereign debt mutualisation seems to be taking place through the back door. It would be highly undesirable to stretch the ECB’s mandate, but as long as wide structural differences between countries persist there is unlikely to be any convergence or reduction of imbalances. Prof. Clemens Kool probes these issues in this edition of Financial Insights entitled ‘The Sense and Nonsense of Eurobonds’. He believes it would be wise to experiment cautiously with a form of eurobonds.
 

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