- By Mark Brown
Germany’s predictable debunking of the push to create a common European Union bond to defuse the debt crisis overlooks a new reality already apparent in European government debt markets — the move toward some sort of common bond issuance has already begun.
Earlier this year, an EU borrowing entity called the European Community issued bonds rated triple-A and guaranteed by the 27 EU member states to raise money for financial assistance to Latvia and Romania under the balance of payments facility.
The EU now looks set to issue more “EU bonds” in January under the €60 billion European Financial Stabilisation Mechanism, set up to support euro-zone members. Then comes more issuance by the European Financial Stability Facility, which will borrow money in the bond markets to on-lend to troubled sovereigns borrowers, namely Ireland.
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