Set up a temporary euro Treasury Bill Fund with pro rata liability, to come into operation only after the TSCG and 'two pack' are in force, so ensuring the economic governance component of the political union is functioning completely.
Brief Summary
Set up a temporary euro Treasury Bill Fund with pro rata liability to come into operation only after the TSCG and `two pack’ are in force, so ensuring the economic governance component of the political union is functioning completely. The Fund’s exposure to a State would be capped at [20-30 per cent] of the State’s `gross government debt’ – giving a theoretical maximum size of around €2.5 trillion (more than seven times the size of the US TARP). This Fund would give a credible financial bridge from the current crisis to beyond 2015, when euro area members are already committed by their Medium Term Objectives (MTOs) to achieve balanced budgets. The Fund's likely size of perhaps €1.6 trillion might not be much greater than existing euro area pro rata guarantees, as it would substitute much of the ECB’s deposit liabilities and those of the EFSF. It could become the foundation of a European Treasury.
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© Graham Bishop
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Euro Treasury Bill Fund.pdf
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