Eurobonds or euro-bills, something is moving in the Old Continent. Note the former, minus the latter, in the same way these are instruments that would allow the States to be able to enjoy bonds guaranteed by the European Community, or rather, guaranteed in the last resort by the economically stronger countries, i.e. Germany and to a lesser extent France. But now that the Mercozy crisis has dissolved, German Chancellor Angela Merkel is the only one left, for now, who hasn't retreated an inch on the Eurobond hypothesis. Today, yet another confirmation: "Eurobonds are an unsustainable solution," she said to the Bundestag, the German Parliament.
She is adamant, minus those around her. To paraphrase Olli Rhen, EU commissioner for economic affairs, "the music of Eurobonds" is however starting to take shape. At least on a theoretical level, notes on the score. And even Prime Minister Monti is now speaking of "times approaching" to those who ask him about European bonds. And he waited a while. Because Eurobonds have been talked about since the XNUMXs. The president of the European Commission Jacques Delors spoke about it for the first time, conceived as a hypothesis to facilitate infrastructure investments in Europe. Times in which the sovereign debt crisis could not be prevented. Today they are the only possible antidote to the existence of the single currency and to the solution of the problems relating to the debt of the States. A situation aggravated by the Spanish crisis, the Italian one and by the political storm that crosses Holland.
But to meet German needs, other solutions are being explored. The euro-bill hypothesis is the new entry in the debate among economists. The idea came to a group of scholars from the Franco-German area, including Thomas Philippon, who was about to take office in the Hollande government, who repeatedly called for the introduction of Eurobonds during the electoral campaign. These are short-term securities (maturity of less than one year), issued by a Debt Management Office European Union, something which, to simplify, could be comparable to an EU-registered secretariat of the Treasury. An 800 billion euro market, bonds that would enjoy high liquidity and low interest rates. In addition, with the EU brand on the shields, the defense against speculative phenomena would be facilitated. Each country could finance itself with these instruments for a maximum of 10% of GDP. A bit like what happens in the USA with Treasury Bills, from which our people have borrowed the idea and name. And not by chance. Because in addition to Germany, the Euro-bills must also appeal to investors, especially American ones.
For Germany, the bitter pill of the PIIGS debt guarantee would be sweetened on the one hand by the mandatory condition of respecting the budget constraints sanctioned by the fiscal compact for those wishing to finance themselves with Euro-bills, on the other that long-term emissions will in any case be the prerogative of individual states. Spain, Italy or Portugal for example, on the one hand would enjoy a rating on their short-term debt modeled on the German guarantee, on the other hand they would remain subject to the judgment of the markets with regard to long-term bonds.
A compromise that has already obtained the consent of the leaders of the International Monetary Fund Christine Lagarde (director general) and Olivier Blanchard (chief economist). Lagarde would then have the task of convincing Angela Merkel of the validity of the proposal. The assent could mean soothing the wounds of the late Merkozy and opening a new European course with a more direct dialogue with Hollande and Monti. And maybe tease someone more imaginative to coin a new neologism.
