Eurobond, yes we can!

Francesco Marchionne ()

BANCARIA, 2012, vol. 05, 22-44

Abstract: This paper explores an innovative solution to exit from the European debt crisis exploded in 2010.The proposal is based on the securitization of sovereign debts and the creation of a jointly responsibility bond among European countries, the Eurobond, with the surer tranches of their sovereign debts. Even if the idea is perfectible, the application of different economic concepts distinguishes itself from similar proposals and makes seemingly affordable, feasible and worth to realize it. From a financial viewpoint, it considers the risk of sovereign default as a physiological feature of the financial system. From a fiscal viewpoint, the proposal leads to a gradual fiscal union of Eurozone avoiding the reticence of virtuous countries.The idea is applicable also at the national level among local administrations: the mutual monitoring among partners and the threaten of exclusion from the next bond issues could incentive virtuous behaviour of participants and promote an endogenous public debt reduction

JEL-codes: G01 G32 H63 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:ban:bancar:v:05:y:2012:m:may:p:22-44

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