La crise économique et financière: quelles conséquences?
19ème Congrès des Economistes Belges de Langue Française
17 novembre 2011
[en] In this paper, we examine the opportunity to create a Central Agency of European Debt (CAED) to improve the coordination between the issuances of sovereign debt in the EMU, by allowing the Agency to issue euro – bonds and determine the optimal proportion of foreign currency denominated debt and the corresponding maturity at the EMU level. We argue that this Agency could decrease both the overall cost of sovereign debt at the EMU level and the cost of sovereign debt of the individual EMU countries, including the strongest members (Germany, the Netherlands). Such a mechanism requires four economic conditions: a collective guarantee by members for the euro-bonds, a marking-to-market process for each individual member, a seniority of existing sovereign debt, and an internal sovereign swap market between the members of this Agency.
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