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Eurobonds: Solution or Mess?

Eurobonds: Solution or Mess?

The EU-Commission has recently proposed the idea of Eurobonds once again. The president, Mr. Barroso, hopes that Eurobonds will reduce the bond-spreads and hence solve the current EMU crisis. Is this just a hope? Madam No – the German chancellor Ms. Merkel – is rigorously against the principle of Eurobonds. Interestingly, the whole German coalition government has agreed upon this issue without any further disputes, unlike in many other issues in the past two years. They believe Eurobonds might reduce the consolidation effort and are thus the evil at all. Who is right?