Ban the Common Bond
The increase in interest-rate spreads between euro-zone countries since the onset of the global financial crisis has led to wider support for the idea of a pan-European bond. But such a bond would impose high financial costs on fiscally sound countries, encourage continued profligacy by high-deficit countries, and undermine the credibility of the euro zone as a whole.
https://prosyn.org/TVtvy08
FRANKFURT – With the deepening of the global financial crisis, spreads between the government bonds of different European Monetary Union (EMU) countries for a while widened dramatically. Relative to German bonds, the spreads in February of secondary-market yields of government bonds with maturities of close to ten years were 141 basis points for Italy, 257 for Greece, and 252 for Ireland, compared to just 32, 84, and 25 basis points, respectively, in 2000.