Reuters
September 13, 2011
Calls are growing for euro zone states to consider issuing bonds jointly underwritten by all 17 countries in the bloc -- so-called euro zone bonds.
Some economic analysts, senior European Union officials, members of the European Parliament and financial market participants believe such a step could help resolve the region's debt crisis, but little flesh has so far been put on the bones of the idea.
Germany, which is the euro zone's most powerful economy and enjoys the lowest sovereign borrowing costs, would stand to lose most if such bonds were introduced as it would effectively end up having to underwrite weaker, more risky member states. As a result, German Chancellor Angela Merkel is adamantly opposed.
Despite her opposition, clamor for the bonds has not diminished. The European Commission is now expected to come up with some ideas for the European Parliament to study, an early step in what could lead to more formal legislative proposals.
Below, we look at some ideas already in circulation, and at how realistic the adoption of euro area bonds really is.
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