A common European bond market would certainly deepen the Monetary Union. But the question is: is a common European bond market possible and feasible in the present circumstances? Opinions differ. A major obstacle seems to be the "no bail-out" clause that is a centerpiece of the Maastricht Treaty.
A common European bond market would certainly deepen the Monetary Union. But the question is: is a common European bond market possible and feasible in the present circumstances? Opinions differ. A major obstacle seems to be the "no bail-out" clause that is a centerpiece of the Maastricht Treaty on Monetary Union and that is essential for fiscal discipline in individual countries.
But member states not showing solidarity to share burdens is a contradiction to common deficit funding. Much of the discussion then comes down to the question whether both strong and weak economies benefit from a common bond market. And if so, how to convince them of this.
Of course, as always in the long history of European integration, everything is possible if political will exists. After the fall of the Berlin Wall, the political will was present to go further in European economic and financial integration by creating a common currency. Is the European Union after the financial crisis determined enough to go a step further into monetary integration?
The debate on the pros and cons of creating a common European bond market often sounds like a discussion between "believers" and "non-believers". But even if it is a matter of believing, a minimum of facts and figures is necessary before one can make a judgment.
That is why the European League for Economic Cooperation with its long standing record of encouraging progress in the various discussions of European integration, was keen to reopen the debate on the common European bond market. In December 2009 the members of ELEC’s Monetary Commission participated in a lively discussion of several papers representing the (sometimes conflicting) views on the issue.
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