Monti: "You can only get out of the crisis with Eurobonds"

“Eurobonds are the only answer to the European crisis”. This is the title of the speech on the eve of the Eurogroup summit by former European commissioner Mario Monti (and his co-author, European parliamentarian Sylvie Goulard) which will be published in tomorrow's Financial Times. “The leaders of the Eurozone – writes the president of Bocconi – have a clear alternative before them, when it comes to meeting this morning at the summit: either they will limit themselves to declaring that they are ready to do whatever is necessary to overcome the crisis, or they will really act”. In the first case, due to the skepticism of the markets, the inaction of European leaders will make the defense of countries such as Italy or Spain increasingly costly. Alternatively, finally, "the heads of state will have to show leadership", putting into practice a truly common strategy. It is up to Angela Merkel, in particular, to convince the Germans that European unity, in a long-term vision, is more convenient for taxpayers than a policy based exclusively on the protection of short-term interests, "Fortunately for Europe and the Mrs Merkel – writes Monti – the two main German opposition parties, the SPD and the Greens, are pro-European”. “This offers – continues the economist – a unique opportunity for Merkel and Finance Minister Wolfgang Schauble to support the use of Eurobonds, an initiative that would strengthen, you know in practice and in the perception of citizens, the close link between Germany and the Euro”. Commissioner Olli Rehn has already made it known, explains Monti, that, within the year, the Commission will be able to propose Euro-issues. They will have to be financial instruments intended to govern existing debt in the most efficient way and not to finance new outgoings. The possible mechanisms are innumerable, including the decision to give new powers to the European Financial Stability Facility. “It is by no means certain that the novelty could cause an increase in the cost for the countries that have the strongest credit bases – warns Monti – if one takes into account the liquidity guaranteed by an instrument of this type and the turbulence of this period on the front of sovereign debts". “By now – concludes the former competition commissioner – consensus is growing around the idea that there is no way out of the eurozone crisis without resorting to Eurobonds. Tomorrow's summit could at least give a precise indication of the governments' attitude on the matter: a European vision, based on the adoption of this instrument. With a precise roadmap, it could be an effective way to restore trust and credibility”