Commission proposes ‘eurobonds’

[Dover]

The introduction of a joint “eurobond” that would replace national issuance by individual members of the eurozone could offer the best solution for policymakers seeking a more stable sovereign debt market, according to a study by the European Commission.

To be published on Wednesday, but seen by the Financial Times, the study argues that the creation of commonly backed “stability bonds” would ensure all eurozone members could meet their financing needs and create a vast market that could compete with US Treasuries as a global benchmark.

This approach would be most effective in delivering the benefits of stability bond issuance,” the report says. “ would assure full refinancing for all member states irrespective of the condition of their national public finances.”

The complete substitution of national bonds for so-called “eurobonds” is one of three options outlined in the study. The report acknowledges that the move would require extensive changes in European Union treaties that could delay its implementation for years.

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http://www.ft.com/intl/cms/s/0/da6468de-136f-11e1-9562-00144feabdc0.html?ftcamp=rss#axzz1eLRh7GqC