Tribune | 29/08/2011
Henrik Enderlein, German economist and Research Associate at Notre Europe, and Hans-Werner Sinn, German economist, in a debate about the Euro crisis,with different points of views in the Spegiel, August 23, 2011.
Extracts:
'Euro Bonds Would Destroy the Euro'Many in Europe would like to see the introduction of euro bonds to help indebted euro-zone member states borrow money on international markets. Germany, however, has refused. SPIEGEL listens in as two top German economists debate the issue.
SPIEGEL: Hans-Werner Sinn, Henrik Enderlein, do we need shared sovereign bonds, so-called "euro bonds," to end the financial crisis?
Enderlein: By all means. Correctly construed, euro bonds are the best instrument for preventing the collapse of the euro zone.
Sinn: The opposite is true: Euro bonds would destroy the euro zone. If all countries -- regardless of their creditworthiness -- were to pay the same interest rate, the last impediments to excessive state indebtedness would fall away.
Enderlein: If we were dealing with a functioning economic environment, Mr. Sinn, your assumption would be correct. But we have a crisis, and to end it, we need to swiftly restructure the debts of Greece, Portugal and most likely Ireland, as well. We need to give these countries' creditors a reliable type of security. My suggestion would be having one euro bond for every two Greek sovereign bonds. For investors, that would mean a loss of roughly 50 percent. But, in return, they would get a security that banks could deposit as collateral, including at the central bank and for inter-bank transactions.
Download here the interview.
Articles by
Henrik Enderlein :
