''..Jean-Claude Juncker, the prime minister of Luxembourg, certainly looked spent when, after chairing a meeting of euro-zone finance ministers on December 6th, he said he had “no new decisions” to announce. Only hours earlier, Mr Juncker had surprised his colleagues in an article co-written with Italy’s finance minister, Giulio Tremonti, urging euro members to issue collective Eurobonds. Such “E-bonds” might eventually account for up to 40% of the euro zone’s GDP.
The idea is a variation on a proposal made in May by the Bruegel think-tank in Brussels, which suggested a limit of 60% of GDP for pooled “blue” bonds. These would clearly reduce interest rates for weaker countries, but even stronger ones might benefit from the existence of a larger and more liquid market. “Red” bonds over the debt threshold would become especially risky, encouraging discipline without causing outright collapse.
Mr Juncker and Mr Tremonti suggested that their plan would “send a clear message to global markets and European citizens of our political commitment to economic and monetary union and the irreversibility of the euro.” Instead the Germans, Dutch and Austrians sent the authors a clear message to shut up..'' THE ECONOMIST
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