Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/78026
Authors: 
Claessens, Stijn
Mody, Ashoka
Vallee, Shahin
Year of Publication: 
2012
Series/Report no.: 
Bruegel Working Paper 2012/10
Abstract: 
This paper discusses proposals for common euro area sovereign securities. Such instruments can potentially serve two functions: in the short-term, stabilize financialmarkets and banks and, in the medium-term, help improve the euro area economic governance framework through enhanced fiscal discipline and risk-sharing. Many questions remain onwhether financial instruments can ever accomplish such goals without bold institutional and political decisions, and,whether, in the absence of such decisions, they can create new distortions. The proposals discussed are also not necessarily competing substitutes; rather, they can be complements to be sequenced along alternative paths that possibly culminate in a fully-fledged Eurobond. The specific path chosen by policymakers should allow for learning and secure the necessary evolution of institutional infrastructures and political safeguards.
Subjects: 
Eurobonds
eurozone
fiscal risk-sharing
European
Monetary Union
JEL: 
A01
E42
E44
E61
F33
F36
H63
H77
N24
Document Type: 
Working Paper
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