Financial Times
December 4, 2011
With the eurozone sovereign debt crisis seemingly deepening by the day, ever more desperate potential solutions are being wheeled out, with the concept of eurobonds the latest to gain traction.
The European Commission recently published a green paper on what it euphemistically calls “stability bonds”, designed to pool sovereign issuance among the eurozone’s 17 member states, allowing those struggling to access the market at sustainable rates, such as Greece, Portugal and Italy, to lean on the bloc’s remaining triple-A states.
While Angela Merkel, the German chancellor, has repeatedly opposed the concept in public, press reports from Germany suggest opposition is waning in private, if a mutually acceptable structure can be found.
Would asset managers be interested in eurobonds, and would they be likely to help solve the crisis? While many managers that FTfm spoke to believe eurobonds could help to some degree, few are convinced they can ultimately solve the crisis.
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