tag:blogger.com,1999:blog-27932062.post8154730700754684952..comments2023-10-10T15:39:35.168+00:00Comments on Centre for European Reform: EU summit: Enough to save the euro?Centre for European Reformhttp://www.blogger.com/profile/06815454225955436329noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-27932062.post-59576196906619536182011-12-14T17:56:21.842+00:002011-12-14T17:56:21.842+00:00Mutualised debt is a bad idea. It is only a tempor...Mutualised debt is a bad idea. It is only a temporary solution.<br /><br />The proposals for a capped quantity of mutual debt that each country can issue, are good for investors, but will eventually lead us back to the same place we are now.<br /><br />If countries can issue 60% of GDP as debts in mutualised form (as proposed by the Commission), this creates a new super-secure investment asset for investors to trade -it's not hard to see the appeal of this for them. But implicit to this idea, is the notion that all remaining national debt is non-mutualised and riskier. <br /><br />However, our highly indebted Member States have debts far greater than 60% of GDP. Once they have issued their full quota of mutualised debt (in roughly a decade), they will return to the same problem as they have right now -selling non-mutualised, national debt. Only this time, the situation will be worse, because all of the Eurozone will be on the hook if they default.<br /><br />Eurobonds is a transient solution at best which is being promoted by investors who simply want to get their hands on this super-asset, rather than solve the crisis.Gav Rochehttps://www.blogger.com/profile/04831954459364234417noreply@blogger.comtag:blogger.com,1999:blog-27932062.post-32228379814666414602011-12-09T19:33:33.071+00:002011-12-09T19:33:33.071+00:00Unfortunately, I agree with Simon Tilford. The pal...Unfortunately, I agree with Simon Tilford. The palliative effect on the markets will not be much greater than it was after the decisive agreements of 21 July and 27 October. If Nicolas Sarkozy is hoping that this will take him to the elections in April/May, he will be disappointed in rather short order.<br /><br />François HeisbourgFrançois Heisbourgnoreply@blogger.comtag:blogger.com,1999:blog-27932062.post-30497577455761873982011-12-09T19:05:49.513+00:002011-12-09T19:05:49.513+00:00excellent analysis.excellent analysis.Anonymousnoreply@blogger.com