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Consequences of Different Eurobond Proposals

Author

Listed:
  • Schäfer Hans-Bernd

    (Bucerius Law School, Hamburg, Germany)

  • Bigus Jochen

    (Freie Universität Berlin, Berlin, Germany)

Abstract

We analyze various Eurobond proposals and show that they have different effects on moral hazard, interest rates, international transfer payments and the necessity for European fiscal centralization. On closer inspection, these consequences are more diverse than the discussion on Eurobonds so far suggests. For instance, Eurobonds might increase rather than decrease marginal interest rates in weaker countries. Some proposals lead to international transfer payments while others do not. Some require changes to the Treaty on the Functioning of the European Union, others require changes to national constitutions, and others yet require both. Some proposals, while not necessitating such legal change, may still have mutual advantages for the issuing states.

Suggested Citation

  • Schäfer Hans-Bernd & Bigus Jochen, 2016. "Consequences of Different Eurobond Proposals," Review of Law & Economics, De Gruyter, vol. 12(3), pages 523-553, November.
    • Handle: RePEc:bpj:rlecon:v:12:y:2016:i:3:p:523-553:n:4
    DOI: 10.1515/rle-2016-0042
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    References listed on IDEAS

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    More about this item

    Keywords

    Eurobonds; euro crisis; law and economics; sovereign debt;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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