Europe will move to Eurobonds for now Brussels gets it – if the euro fails, they lose their jobs in Brussels. Individual government bond issues have prevented the Euro from becoming a major currency and it now trails even the Chinese Yuan in trade. Nonetheless, some are trying to argue such as the German bank co-chief Anshu Jain that he naively claims that maintaining separate debts for each country is strangely an important disciplining effect for debt reduction. The problem with his view – government do not pay back debt and that includes Germany as is the case with the USA. Where is the discipline?
The Eurobonds are coming when the ECM turns down from 2015.75 and this will be seen as the great solution…
This post was published at Armstrong Economics on September 3, 2014.
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