As Angela Merkel opposes the existence of eurobonds I propose here something that I find it could be something good for the eurozone. The bonds I have thought would be called EUROBOUNDS. I use the word BOUND because it sounds similar to BOND and at the same time it referes to the fact that the bond is BOUND to the euro.
What would be an EUROBOUND?
A eurobound would be a bond that is a mix of different bonds from the eurozone.
A eurobound would give you more interest than a German bond but at the same time it would be less risky than a peripheral bond.
How safe would be a eurobound? Well, it would not be so safe as a yet inexistent eurobond because if a peripheral country cannot pay back then you would lose that percentage! But you would not loose the rest!
The eurobond would be a bag of different eurozone bonds.
Does this not exist right now?
Well, I do not know but my idea is that this EUROBOUNDS would be promoted in a way that they were very much supported from the eurozone countries. Some of the bonds of the eurozone countries would be sold through eurobounds
Which are the proportions? Well, I am not an economist! I have an idea but I can not say everything! One possibility that occurs to me is that the eurobounds should be at 0.5, 1, 1.5,2 and so rates.
So I should go to my local bank and I would say: Please put me one eurobound at 1 per cent rate.
So with this eurobounds you could choose well! If you choose a eurobound at 1.5 per cent rate maybe the 100% is made of German bond. If you buy a eurobound at 4 per cent rate maybe is made 50 per cent of German bond and 50% from the rest!
With this new bond we could also tell the people of Europe to be responsible so that the debt in Europe is mostly bought by European citizens.
With eurobounds you would not choose between German or Spanish bonds. You would choose between interests of 2,4, 6 per cent. So it is not all of nothing!
The idea of the eurobounds maybe related to a traditional sweet fruit from Catalonia called PANELLETS. You eat these wonderful sweet on All Saints. It is quite expensive the original one so you can buy a dish with a mix so that it is cheaper but it contents too some of the original panellets.