The Expert Group's overall conclusion was:
"Both a DRF/P and eurobills would have merits in stabilising government debt markets, supporting monetary policy transmission, promoting financial stability and integration, although in different ways and with different long term implications. These merits are coupled with economic, financial and moral hazard risks, and the trade-offs depend on various design options. Given the very limited experience with the EU’s reformed economic governance, it may be considered prudent to first collect evidence on the efficiency of that governance before any decisions on schemes of joint issuance are taken. Without EU Treaty amendments, joint issuance schemes could be established only in a pro rata form, and - at least for the DRF/P - only through a purely intergovernmental construction raising democratic accountability issues. Treaty amendments would be necessary to arrive at joint issuance schemes including joint and several liability, certain forms of protection against moral hazard and appropriate attention to democratic legitimacy."
The full Report is here: link
In response, President Barroso said: "The Commission will carefully study the report and decide how to follow it up in due course. But before we do, we need to have a democratic debate on these ideas with citizens, governments and the European Parliament. The upcoming European elections are a prime opportunity to discuss what kind of Union we really want."
The Press Release from the European Commission about the Report is here: link
The Group was set up at the explicit request of the European Parliament and ECON will hold a public hearing on the Report tomorrow link and the debate will start.
This will be web-streamed so you can follow the debate live.
Graham Bishop - Consultant on EU Integration - Political, Financial, Economic, Budgetary
© Graham Bishop
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