The advent of Hollande on the European scene will probably allow, beyond the intentions of the French President himself, to put the evolution of the European institutions in the federalist direction back at the center of the agenda, starting from the themes of growth. Indeed, it is evident to everyone (even to Mrs. Merkel, privately, for the moment) that we have to find the square of the cul de sac we have slipped into, reconciling an inevitable mutualization of risks with declared policies that restore hope for the future. To avoid remaining vague, I start very concretely from the public document of the European Commission, in which they are described three different versions of Eurobonds:
1. Replacement Assessment of national debts and guarantee joint. The public debts of the States would be completely replaced by Eurobonds, albeit gradually. All states would guarantee and if a country were not able to repay its share of the debt, the joint guarantee of the other states would be triggered.
2. Replacement partial of national debts and guarantee joint. The public debts of the States would be replaced only in part by Eurobonds (there would be a overdrive as a percentage of GDP upon their issue) while, for the remaining part, the States should continue to issue national bonds.
3. Replacement partial of national debts and guarantees separate. It works like the second example, but the guarantee on Eurobonds would be pro-rata: each State guarantees only a pre-established quota of emissions.
Among these solutions, the first responds better to the need for European fiscal integration and represents a significant step towards a "credible" European Union. However, due to the joint guarantee, this option would require a revision of the Community Treaties, making it therefore difficult to apply in the short term, with the current timid leadership.
The partial replacement of national debts (solutions 2 and 3) would be easier to implement, provided that the holder of securities is allowed to gradually replace the national debt securities in the portfolio with Eurobonds.
Socializing debts can lead to the typical problem of moral hazard: the usual sly ones would continue to squander at the expense of serious countries. However, the partial and incomplete replacement of debts, placing a limit on the issuance of Eurobonds, would make it possible to remedy Greece's propensity to borrow on the spot. In the short term, a valid option to better manage the fear of moral hazard and the now essential need to promote economic growth is represented byissue – on a limited scale and for objectives – of specific bonds characterized by joint guarantee. For example, to promote growth, one could focus on a more efficient use of the European structural funds through public/private instruments such as project bonds. With these risk sharing tools it is in fact possible to increase the resources available for development projects by exploiting the leverage on public funds made available by the European Union.
The European Commission, with a communication to the European legislative institutions last October, undertook to carry on the project "Europe 2020 Project Bond Initiative”. The aim of the initiative is to facilitate the financing of projects intended for the development of infrastructures by supporting the issuance of bonds by private entities through risk-sharing by the European institutions, in particular the EIB, which already enjoys an experience in the sector (at the end of 2009 the outstanding debt of the EIB amounted to more than 300 billion euros) and whose Board is made up of the finance ministers of the EU member countries. The bonds supported by the EIB already today represent a "quasi-Eurobond" (although aimed at specific projects) and, as such, harbingers of benefits similar to those of greater fiscal integration. Furthermore, a fund promoted by the EIB with a joint guarantee would not imply a disadvantage for the more virtuous countries. Indeed, any realized losses could be allocated according to the principle of where they arise. The benefits would also be shared by all Member States, including the expected contribution in terms of stabilization and economic growth.
So we launch our project bond idea: we transform our peninsula into the largest existing natural pier, for the reception of merchant traffic coming from the east, which would allow a saving of 5 days of navigation compared to the current calls in the ports of northern Europe, for the transit of goods in the heart of the Old Continent. A win-win project for everyone, with huge induced activities, with available private funds. Solutions and projects that could only be effective if they are taken quickly. The European Union, to remain so, needs concrete answers.
