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Paths to Eurobonds
Author:
Mr. Ashoka Mody null

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Mr. Stijn Claessens
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Mr. Shahin Vallée null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2012: Issue 172
Language:
English
Publication Date:
01 Jul 2012
DOI:
https://doi.org/10.5089/9781475505207.001
ISBN:
9781475505207
ISSN:
1018-5941
Pages:
39
Keywords:
WP; debt issuance; bond restructuring; bonds yes; debt sustainability; restructuring mechanism; sustainability dynamics; Eurobonds; eurozone; fiscal risk-sharing; European Monetary Union; monetary union; seniority structure; overhang problem; Bonds; Government asset and liability management; Fiscal union; Liquidity; Global; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper discusses proposals for common euro area sovereign securities. Such instruments can potentially serve two functions: in the short-term, stabilize financial markets 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 on whether 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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund