I just figured out a potential solution. Instead of a full Euro bond, and instead of breaking up the Eurozone into two pieces, allow countries to pair up for bonds where sets of countries can pair up and support each other.
For example, Germany can pair up with a country that needs help, and they can do a bond together. The primary repayment responsibility would be the country that needs help, with Germany as the "co-signer". That way the markets have stability and trust that their investment will be paid back, the country that needs help gets the funds for their municipal projects, and Germany doesn't have to worry about paying out any money unless their partner completely folds.
Monday, December 06, 2010
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