Euro debt : Should the euro zone’s debt be mutualised?

Posted on July 25, 2012


The Economist

Defending the motion

Paul De Grauwe
 Paul De Grauwe  
John Paulson Chair in European Political Economy, London School of Economics
By pooling government debt, the weakest in the union are shielded from the destructive upsurges of fear and panic that regularly arise in the financial markets of a monetary union and that can hit any country.
Against the motion
Ansgar Belke
 Ansgar Belke  
Professor of Macroeconomics, University of Duisburg-Essen
The mutualisation of the euro zone’s debt to bring about the convergence of interest rates will not, in the long run, tackle the roots of the problem. Instead it will sow the seeds of an even larger crisis.
The moderator’s opening remarks
Anton La Guardia
Jul 11th 2012 | Anton La Guardia 

The last European summit that ended on June 29th declared that it was “imperative to break the vicious circle between banks and sovereigns”. Markets revived on the hope that the leaders were finally ready to act to deal with the threat to the euro, and then soon lost heart amid the cacophony of rival interpretations about what had been agreed. Still, the leaders had identified the right issue: weak banks and weak sovereigns are like two bad swimmers that are pulling each other under water.

But which one should be saved with first? Paul De Grauwe says start with the sovereigns, by throwing them the lifejacket of joint-issued debt. In effect, richer countries would guarantee at least part of the debt of weaker ones.

Ansgar Belke reckons instead that it is better to start by saving the banks. This would be done through stronger central supervision and the mutualisation of some liabilities in the banking sector, for instance through a joint fund to wind up failing banks and provide a Europe-wide guarantee of bank deposits. In effect depositors in solid banks would be guaranteeing the savings of those in more fragile ones.

Both debaters agree on many things, such as the threat to the survival of the euro. They both recognise the danger that debt mutualisation could bring moral hazard and higher costs for creditor countries. For Mr Belke there is no getting around these problems. For Mr De Grauwe, though, these risks can be removed, or at least mitigated through careful design of the system. For instance, the euro zone could impose conditions on countries seeking the benefit of jointly issued debt.

The proponent sees the main threat to the euro zone as coming from the fear and panic that can suddenly raise borrowing costs and push countries into insolvency. His opponent reckons the principal menace stems from removing this market pressure too quickly, lest it dampen the need to reform.

Both speak of the political backlash that the crisis creates. For Mr De Grauwe it is excessive austerity in debtor nations that will be resisted; for Mr Belke it is excessive liabilities in creditor states that can cause resentment.

In some ways, through, they are not so far apart. Mr Belke concedes that it is necessary to have some mutualisation of debt, if only to recapitalise banks. Mr De Grauwe accepts that debt mutualisation must be limited to avoid moral hazard.

Reading through the openings, I have two questions that I hope will be answered in the next round. If the banking sector is really to be stabilised, a solution will surely have to deal with the devalued sovereign debt that some are holding. Would they not be better off holding at least some Eurobonds instead of, say, Greek or Spanish bonds? That said, economists who advocate Eurobonds need to find a way of making them politically acceptable. How much political union is feasible, or even desirable, just for the sake of a single currency that many never loved?

I am looking forward to the replies to these and other points, and to the contributions from the audience.

Paul De Grauwe
The proposer’s opening remarks
Jul 11th 2012 | Paul De Grauwe  

Since the 1970s economists have warned that a budgetary union would be a necessity for a sustainable monetary union. The founders of the euro zone had no ears for this warning. It is now patently clear that they were mistaken and that we face the following hard choice today: either we fix this design failure and move to a budgetary union; or we do not fix it, which means we will have to abandon the euro. Although I was a sceptic about the desirability of a monetary union during the 1990s, I now take the view that we cannot properly manage a deconstruction of the euro zone. A disintegration of the euro zone would produce huge economic, social and political upheavals in Europe. If we want to avoid these, we have to look for strategies that move us closer towards a budgetary union.

A budgetary union, like the one that exists in America, is so far off that there is no reasonable prospect of achieving this in the euro zone during our lifetimes. Does that mean that the idea of establishing a budgetary union is a chimera? Not at all. I will argue that there is a strategy of taking small steps that can lead us in the right direction.

Before outlining this strategy it is important to understand one of the main design failures of the euro zone. This can tell us what exactly has to be fixed.

Euro-zone governments issue debt in euros, a currency they cannot control. As a result, and in contrast to “stand-alone” countries like Britain, they cannot give a guarantee to bondholders that the cash to pay them out at maturity will always be available.

The fact that governments of the euro zone cannot give such a guarantee to bondholders makes them vulnerable to upsurges of distrust and fear in the bond markets. These can trigger liquidity crises that in a self-fulfilling way can drive countries towards default, forcing them to apply austerity programmes that lead to deep recessions and ultimately also to banking crises. This is not to say that countries that have overspent in the past do not have to apply austerity. They will have to. It is rather that financial markets, when they are driven by panic, force austerity on these countries with an intensity that can trigger major social and political backlashes that we may not be able to control. The effects are there for us to see in a number of southern European countries.

The previous diagnosis of a design failure of the euro zone leads us to the idea that some form of pooling of government debt is necessary to overcome this failure. By pooling government debt, the weakest in the union are shielded from the destructive upsurges of fear and panic that regularly arise in the financial markets of a monetary union and that can hit any country. Those that are strong today may become weak tomorrow, and vice versa.

Of course, not any type of pooling of national debts is acceptable. The major concern of the strong countries that are asked to join in such an arrangement is moral hazard—that is, the risk that those that profit from the creditworthiness of the strong countries exploit this and lessen their efforts to reduce debts and deficits. This moral hazard risk is the main obstacle to pooling debt in the euro zone. The second obstacle is that inevitably the strongest countries will pay a higher interest rate on their debts as they become jointly liable for the debts of governments with lower creditworthiness. Thus debt pooling must be designed in such a way as to overcome these obstacles.

There are three principles that should be followed in designing the right type of debt pooling. First, it should be partial—that is, a significant part of the debt must remain the responsibility of the national governments, so as to give them a continuing incentive to reduce debts and deficits. Several proposals have been made to achieve this (for example, Bruegel and the German debt redemption plan). Second, an internal transfer mechanism between the members of the pool must ensure that the less creditworthy countries compensate (at least partially) the more creditworthy ones. Third, a tight control mechanism on the progress of national governments in achieving sustainable debt levels must be an essential part of debt pooling. The Padoa-Schioppa group has recently proposed a gradual loss of control over their national budgetary process for the breakers of budgetary rules.

The euro zone is in the midst of an existential crisis that is slowly but inexorably destroying its foundations. The only way to stop this is to convince the financial markets that the euro zone is here to stay. A debt pooling that satisfies the principles outlined above would give a signal to the markets that the members of the euro zone are serious in their intention to stick together. Without this signal the markets will not calm down and an end of the euro is inevitable.

Ansgar Belke
The opposition’s opening remarks
Jul 11th 2012 | Ansgar Belke  

The mutualisation of the euro zone’s debt to bring about the convergence of interest rates will not, in the long run, tackle the roots of the problem. Instead it will sow the seeds of an even larger crisis in the future.

We have seen what happened in the early years of the euro, when interest rates largely converged. Paradoxically, perhaps, this paved the way for a greater divergence of national fiscal policies. A reckless lack of discipline in countries such as Greece and Portugal—be they more (Greece) or less (Portugal) insolvent—was matched by the build-up of asset bubbles in other member countries, such Spain and Ireland, deemed merely illiquid. Structural reforms were delayed, while wages outstripped productivity growth. The consequence was a huge loss of competitiveness in the periphery, which will not be resolved by the mutualisation of debt.

Debt mutualisation can take different forms. One is to mutualise new sovereign debt through Eurobonds. Another is to merge part of the old debt, as advocated by the German Council of Economic Experts with its proposal for a European Redemption Fund. A third is to activate the euro zone’s “firewall” by using the rescue funds—either the temporary European Financial Stability Facility (EFSF) or the soon-to-be permanent European Stability Mechanism (ESM)—to buy bonds on the secondary market, or to inject capital directly into distressed banks. Indeed, the ECB is already engaged in a hidden form of mutualisation—of risk if not (yet) of actual debt—through its programme of bond purchases and its long-term refinancing operations for banks.

Almost all these are bound to fail for economic or political reasons, or both. The governments of even financially strong countries cannot agree to open-ended commitments that could endanger their own financial stability or, given that they are the main guarantors, that of the bail-out funds. And the danger of moral hazard is ever-present.

Any form of mutualisation involves an element of subsidy, which severely weakens fiscal discipline: the interest-rate premium on bonds of fiscally weaker countries declines and the premium for stronger countries increases. Fiscally solid countries are punished and less solid ones, in turn, are rewarded for their lack of fiscal discipline and excess private and public consumption.

If yields are too low, there is no incentive for private investors to buy sovereign bonds. The countries become decoupled from the capital markets permanently and the debt problems become increasingly structural.

This is true of the ECB’s bond-buying. The credit risk is thus just rolled over from the bonds of the weaker countries to those of the stronger ones, and the ECB is made responsible for its liability. Over time, the ECB’s measures might be inflationary. Allowing the rescue funds to buy bonds is little different, except that they lack the lending capacity to be credible. If they are given a banking licence, as some argue, it would be no different from the ECB buying bonds directly.

What of the European Redemption Fund (ERP)? This could be of particular help to Italy, which could unload half of its debt. But its partners could not force it to tax its citizens to ensure it pays back the dormant debt. And with the assumption of debt, Germany’s credit rating might drop, due to the increase in the German interest burden. The pressure on Italy and Spain to consolidate their budgets sustainably would be reduced. The problems of Greece, Ireland and Portugal would not be resolved, since these countries are unlikely to qualify for the ERP.

On top of moral hazard, there are the political obstacles, which would be most acute in the case of Eurobonds. Germany demands political union before Eurobonds can be considered. But this is to put the cart before the horse: a political union would be created simply to justify Eurobonds. Advocates say treaty changes and high-level political agreements would be sufficient to make sure that euro-zone member countries comply with all decisions taken at the euro-zone level. But the experience of Greece’s adjustment casts severe doubt on such optimism.

A quick glance at the World Bank’s databank of “governance indicators” shows that differences between euro-zone members, on everything from respect for the rule of law to administrative capacity, are so great that political union is unlikely to work, at least in the next couple of years. It follows that the basis for Eurobonds is extremely thin.

The introduction of Eurobonds would have to be backed by tight oversight of national fiscal and economic policies. But there is no true enforcement as long as the euro-zone members remain sovereign. Intervening directly in the fiscal sovereignty of member states would require a functioning pan-European democratic legitimacy, but we are far away from that. Voters in southern countries can at any time reject the strong conditionality demanded by Brussels, while those of northern countries can refuse to keep paying for the south. And either can choose to exit the euro zone.

The emphasis on debt mutualisation means the debate, at least in Germany, has become a question of “all or nothing”: either deeper political union or deep chaos. But there is an alternative to the notion of co-operative fiscal federalism involving bail-outs and debt mutualisation: competition-based fiscal federalism, of the sort successfully operating in America, Canada and Switzerland, among others. These countries have largely avoided serious and sustained public debt in their component states. The sub-federal entities, faced with insolvency, have a great incentive to take early corrective action—without having to be forced into a corset of centralised fiscal policy co-ordination.

To achieve this sort of federalism, it is necessary to separate the fate of the banks from that of the sovereigns. What is needed is not a fiscal union, but a banking union. It should be based on four elements: reformed banking regulation with significantly higher equity capital standards; European banking oversight with far-reaching powers to intervene; a banking resolution fund; and a European deposit insurance scheme.

Banking union—a less comprehensive, more clearly delineated and rather technical task—should be much more acceptable than the Europeanisation of fiscal policy as a whole. Only a small fraction of fiscal policy areas would have to be subordinated to central control in a fiscal union.

Obviously, a central resolution authority has to be given the resources to wind up large cross-border banks. Where does the money for this come from? In the long run, a resolution authority would exist alongside a deposit insurance scheme for cross-border banks. This should be funded partly by the banking industry. But there should also be a backstop provided by the euro-zone governments through the EFSF or ESM to cope with systemic bank failure.

As a temporary transition measure, limited debt mutualisation may be necessary—but only to recapitalise banks that cannot be sustained by their sovereigns. However, the amounts required are much smaller than for, say, Eurobonds.

With the banking system and the debt crisis thus disentangled, banking-sector losses will no longer threaten to destroy the solvency of solid sovereigns such as Ireland and Spain. Eurobonds will not be needed, and neither will the bail-out of sovereigns. The debt of over-indebted states could be restructured, which means that the capital market could exert stronger discipline on borrowers.

 Comments from the floor

ddajjbmcm wrote:

Dear Sir,
Mutualization has a single, positive purpose – to eliminate the basis for panic and speculator greed. It in no way affects the agreed return on a debt instrument-protecting the investor, but should eliminate any reason for the resale price of a bond to vary, avert huge disparities in auctions for otherwise identical sovereign debt instruments, and reduce opportunities for speculators to profit from ignorance and panic.
Prof. DCMcGaffey

Dear Sir,

The Economist is mostly left wing pro super large government, and most their posters are left wing liberal democrats….and yet 64% of this mostly leftest group agree that mutualising EU debt would be a huge mistake. Wow. A plesent surprise.

humanista wrote:

Dear Sir,
I fully agree with the idea that full mutualization is the end of the journey to full union and not the solution to this debt crisis.
Everybody has to have a clear idea of what really means to be in some future United States of Europe.

OLDIE wrote:

Dear Sir,
guest-isnnnj, why don’t you say “I” would not sacrifice for a total stranger? Some people do, everyday, oor for the whole of their working life, through mutualization of their retirement and health risks. The problem is not there, it its of responsabilising the deciders.
The Greek political system has led to their situation. However the same system shall elect the next government. Which politician can come with proposals to give up his powers to someone else?

One solution is in preparation: choose the European commission among the members of the European Parliament, and therefore ensure a democratic control on European policies, politicians (and therefore on bureaucrats too.

Democracy never comes easily, as history demonstrates, give it some time to mature.

OLDIE wrote:

Dear Sir,
Partly would be the answer therefore should I say I agree with the motion? I think so. Now it does not mean it should be done instantly and with no conditions attached.
What should be done quickly is a schedule of contractual decisions to be made by European nations leading to such a partial mutualization, together with corresponding controls to bear. You do not have to be anMBA or an officer to know that delegation without control leads to disatrous consequences.
Europe in its present form, but also interbank trading have given us blatant demonstrations of that fact.
So both politicians and free-traders are culprit. Do not authorize any of them to go on undaunted.

And despite The Economist’s known biases against Europe and for liberal trade, no such objective can be obtained without UK changing its ways. It is in no better shape than the others, despite still pretending to the contrary. Is is hesitating to quit for fear of the possible consequences (tariffs, barriers, antagonism, obligation of quoting companies on the continent, God knows what), and has a congenital fear of losing any of its so-called independence (although it goes along meekly with the so-called special relationship, including going to war on false pretexts, and being on the non-receiving end of military technology exchanges).
We have seen the Queen and the Royal Family adapting to change, may we see one day their respectful subjects do the same. Or maybe should the Queen lead the way? Is that what you are waiting for?

here we are wrote:

Dear Ansgar Belke,
I disagree with your incorrect description of the German Council of Economic Experts proposal for a European Redemption Fund (ERP). The proposal suggests that countries requesting to mutualize part of their debt should also pledge the income of specific taxes to repay the mutualized debt. The fiscal compact would ensure that no deficits could be run by any country above the agreed upon limit. Where is the moral hazard you talk about?
The current euro system is forcing Italy to live the euro. Italy already has a primary surplus of 5% of GDP. Over the last 12 months it cut its budget by 5% (prior years had already seen smaller cuts). The Monti government reformed its labor market and one of the then already soundest pension system in the euro zone. Yet, it still pays an average interest rate of 5.8% on its debt. This is not sustainable. Italians are not asking for anybody to pay for their debt…but they will not be willing for much longer to be penalized for euro mechanism shortcomings. We cannot have our cake and eat it too. We must chose, euro break-up or ERP.

Ponzi8thelot wrote:

Dear Sir,
For mualisation to work Europe would need to have one government with all countries having the same Industrial Regulations, retirment age, pension leave wages etc etc. If there isn’t one overral government regulating all areas of work welfare then mutualisation will fail and a bigger problem will emerge.Regards

Dear Sir,
Although Euro zone is facing a serious debt crisis, their debt should not be mutualized. There are several reasons about it. First, the countries are not supposed to receive or suffer from the unreasonable debt. You know, there is no free lunch. Second, the mutuality of the debt will directly the exert an influence upon the life of the countries’ citizens. For rich counties, the welfare and the wages will be lowered. For poor ones, maybe just keep stable of the current level. This simple, I think, is unjustified. Nobody is willing to sacrifice for a utter stranger.

kanorman wrote:

Dear Sir,
Mutualize all debt in return for a zero deficit per country pledge. All deficit spending to come from the supra-national authority and limited to recessions.
Kevin A Norman
Sunnyvale, California

Dear Sir,
Eurobonds offer a fairly robust solution to the eurozone crisis, from an economic perspective. However, the best solution is for the ECB to purchase national debt until governments put back their finances in order. The main flaw of eurobonds is their lack of democratic legitimacy. Indeed the condition of eurobonds is the irrevocable transfer of total budgetary sovereignty of 17 nation-states to Brussels. Creditor countries agree to forfeit their right to oversee where their money is flowing, and debtor countries agree to cut any spending and raise any taxes decreed by Brussels. Even if this were to be carved in the marble of constitutions and international treaties, it would not last very long, because it is profoundly undemocratic. People would simply shrug it off as soon as they would no longer be the slaves of necessity. Therefore, even eurobonds would not be a lasting solution to the eurozone crisis, just a lasting burden. If what Europe wants is a political union, then it might as well get down to work on one. Forcing a crisis from an ill-conceived monetary union onto 500 million people in the hopes that they will be better humoured for a constitutional debate on issues that will not solve any of their immediate problems is irresponsible. Do I want the United States of Europe? Yes. Do I want 10 years of idiotic austerity before I get there? No.

la.výritý wrote:

Dear Sir,

Mr De Grauwe and some debate-commenters, e.g. Mr Bosch from Egmont Institute, are trying to convince readers that they’ve misunderstood the objective of Eurobonds by claiming that the scheme is not about pooling or mutualizing debt, but rather to guarantee the creditors’ risks attached to a debt issuance: “It is commonly issued debt rather than issuance of common debt” (Mr Bosch).

What Mr Bosch fails to address is that the default-risk of countries with a majority of tough hanging socialist voters continues to exist, with or without Eurobonds. This risk is independent from the question if sovereign debt is national debt but commonly issued or if it’s the issuance of supranational “common debt”. The devil takes always the hindmost. And “the hindmost” is always the guarantor in any obligatory relation.

Why do Mr Bosch and Mr De Grauwe presuppose that the voters in Greece, Italy or France will be more willing -all of a sudden- to scarify their “social achievements” and privileges when they, additionally, know that the long-term borrowing-risk is ultimately transferred to offsprings of ‘others’ rather than to their own?

Knowing human nature, the Germans made their participation in the euro-project dependent on the project’s compliance with EU’s general principle of subsidiarity and a particular reference to the non-sharing of risk resulting from its violation; hence, the Maastricht Stability and Growth Pact.

For the heads of the Bundesbank -fully calculated- a fiat-monetization of debt was ruled out and instead a scheme was chosen that functions inwardly as a kind of “gold standard”.

It was understood by all signing governments that in order for a monetary union based on the subsidiarity principle to be successful, its members needed to be part of an “optimal currency area” where convergence and stability among members was extremely important.

The Maastricht Treaty set out convergence and stability criteria that had to be met before a country could become a member of the EMU. The criteria were as follows:

1. Government deficits were limited to be no larger than 3 percent of GDP (this was to promote stability by overcoming the deficit bias of some candidates).
2. Government debt was limited to be no larger than 60 percent of GDP.

This was to ensure that the fiscal fundamentals were similar across potential members. However, because of the flawed human nature and moral hazard on behalf of some members, these rules were not enforced when it became obvious that especially Italy and Greece were unable to meet the criteria before 1999.

Against the loudly voiced protest of the German Bundesbank, on insistence of Italy’s Romano Prodi an “exception” for Italy was negotiated. Shortly after this wreckful deed Prodi became EU Commission President.

The tradeoff was such that “as long as potential members had the good intention” of reducing their debt level they were allowed to enter the EMU.

Thereby the important prerequisite, that the potential member had to demonstrate sustainably by being a complying member in the exchange rate mechanism (ERM) for at least 2 years prior to joining the EMU, was levered out.

This led to a situation whereby a country, once it becomes a member of the Euro club, no longer could be forced to abide by the Maastricht treaty.

A year later Greece made Italy’s approval to its own test case. “After Italy … ” there was no reasonable argument left which could have prevented Greece from insisting on “its right” as well”.

As a result, by 2003 the bursting of the SGP-dam was complete: France, Italy, Germany, Portugal, and Greece had all violated the SGP (as well as the Netherlands by 2004). The Maastricht treaty had become maculation.

We know now that the deeper reason for the common currencies’ dam-failure lies in the Eurozone’s principle of democratic subsidiarity:
Voters, especially in undiscerning societies, will always try to push their social demands to the limits and beyond, while irresponsible politicians will readily promise their potential voters the pie in the sky.

Do Mr Bosch and Mr De Grauwe really believe that a (so-far-hidden) “magic” of the Eurobonds can change the “biest’s” nature, so that all of a sudden the leopard will change his spots, only because other countries’ people are guaranteeing his demands for ever more.

This well known fact is the reason why serious creditors, who by profession are experts in human nature, don’t lent their monies to undiscerning societies . . . without a “guarantor of last resort” behind them . . . Which are preferably the taxpayers of prudent Germany.

. . . This is also exactly the reason why the German taxpayers won’t do it – and better don’t do it!

Dear Sir,
if we in the Eurozone think that fiscal discipline alone will take us out of stagnation, we are deluding ourselves. Nobody is asking Northern Europe to pay for the debts of the South, but to put in place mechanisms that will prevent the interest rates on those debts spiraling totally out of control (a monetary area, like the dollar area, normally does that when “mutualizing” debts). A full Central Bank for the Eurozone might be a chimera, given the present German state of mind: continuing like this, with a Eurozone fiscal pact but no real ECB, is definitely inviting catastrophe AND the end of the Euro. But even reasoning as it were a matter of hard cash and not of guarantees, the price of shortsightedness is evident. Had we acted promptly when the Greek crisis first erupted (because Greece CHEATED on the figures of its deficit), as many suggested at the time, it would have taken 150 billion Euros to cover its debts. Here we are, 4 years on: Europe has spent 450 billion Euros on Greece and no solution is in sight.

Dear Sir,

I suspect it may be more appropriate for the question to focus on “when” (in the readers’ estimation), rather than “should” such an option be exercised.

Yes it may prove a questionable short-term measure, but that is how policy often works.

In responding to sergio scar11’s comment:
The Germans will not allow the central bank’s use of its “unlimited” resources. That’s why I’ve commented right before you that there cannot be a cooperation in this failed attempt of forming a Union, not with so many thickheads in there wanting things their own way!!

KKumar572 wrote:

Dear Sir,

The very fact that weaker southern European nations shared the same currency as their stronger Northern neighbors and issued Euro denominated sovereign debt created a false impression of debt mutualization. Investors ignored the weak fundamentals of Greece and invested based on the presumed strength of the Euro. This created the crisis in Greece. After this, I am surprised to see anyone recommend, with a straight face, a real full-fledged, official debt mutualization. And that is an understatement.

Magalise wrote:

A chimera

Dear Sir,
I’m Italian and I support the motion in the sense of fully empowering the ECB. Italy’s present problems stem from a very large debt, roughly 110 per cent of GNP. Ever wondered why Japan has a debt twice as large (220 per cent of GNP) and yet it’s not on the verge of collapsing? That’s because it has a proper central bank. You cannot have a common currency without a central bank to defend it with “unlimited” resources: that would discourage,possibly without spending a cent, betting against soveraign debts. That’s what the Eurozone is lacking. The rest, eurobonds, special Fund to rescue states or curb spreads etc.. is hardly relevant.

History has shown that the Europeans cannot co-exist…They have been at each other’s throat driven by an individualistic and (on a macro-scale) nationalistic attitude…Those people suffer from a complex of…superiority . Unless a (convenient)buyer-seller relationship exists those monkeys cannot get along…All the talk about trade, banking, fiscal union has no meaning unless a change of attitude takes place..
The Euro is flawed because it was formed hastily among nations that cannot “mix” due to differing views and attitudes..
The southerners will do well to default on their debt, get out of this half-union and go back to their own currency, spending no more than what they produce , minimizing their imports, just like Turkey did…In fact, they should have never accepted any bail-out money to start with.!!
Otherwise this matter is going to turn into a slave-master relationship with those Brussels-Frankfurt based idiots holding the whip…
It won’t be pleasant to lose national sovereignty to a bunch of monkeys, having done so far nothing other than monkey-business!!

Carrick1007 wrote:

Dear Sir,

If there is a single monetary policy in euro zone,it hard to adjust the money supply and interest rate for each nation, in order to keep control the inflation. Mutualising euro zone may lead to favor some of countries, and damage others.