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Eurobonds: The blue bond concept and its implications

Author

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  • Jakob von Weizsäcker
  • Jacques Delpla

Abstract

The Blue Bond proposal, published in May 2010 (Bruegel Policy Brief 2010/03) suggests that sovereign debt in euro-area countries be split into two parts. The first part, the senior ‘Blue’ tranche of up to 60 percent of GDP, would be pooled among participating countries and jointly and severally guaranteed. The second part, the junior ‘Red’ tranche, would keep debt in excess of 60 percent of GDP as a purely national responsibility. This paper revisits the proposal, discusses its implications and addresses some of the comments and criticisms received in response to the proposal. This paper was prepared for the European Parliament’s Economic and Monetary Affairs Committee, session of 21 March 2011 on the interaction between bank and sovereign debt resolution. Copyright remains with the European Parliament at all times.

Suggested Citation

  • Jakob von Weizsäcker & Jacques Delpla, 2011. "Eurobonds: The blue bond concept and its implications," Policy Contributions 509, Bruegel.
  • Handle: RePEc:bre:polcon:509
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    Cited by:

    1. Leandro, Alvaro & Zettelmeyer, Jeromin, 2018. "The Search for a Euro Area Safe Asset," CEPR Discussion Papers 12793, C.E.P.R. Discussion Papers.
    2. Markus K. Brunnermeier & Luis Garicano & Philip R. Lane & Marco Pagano & Ricardo Reis & Tano Santos & David Thesmar & Stijn Van Nieuwerburgh & Dimitri Vayanos, 2016. "The Sovereign-Bank Diabolic Loop and ESBies," American Economic Review, American Economic Association, vol. 106(5), pages 508-512, May.
    3. Jörg Bibow, 2013. "Lost at Sea: The Euro Needs a Euro Treasury," IMK Studies 35-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    4. repec:cpn:umkeip:2012:v2:p:13-26 is not listed on IDEAS
    5. A. Ahmad & Su-ling Fanelli, 2014. "Fiscal Sustainability in the Euro-Zone: Is There A Role for Euro-Bonds?," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 42(3), pages 291-303, September.
    6. John Muellbauer, 2013. "Conditional eurobonds and the eurozone sovereign debt crisis," Oxford Review of Economic Policy, Oxford University Press, vol. 29(3), pages 610-645, AUTUMN.
    7. Győrffy, Dóra, 2014. "Válság és válságkezelés Görögországban. A puha költségvetési korlát szerepe a gazdasági összeomlásban
      [Crisis and crisis management in Greece. The role of soft budget constraints in the economic co
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 27-52.
    8. Adair Turner, 2013. "Comment on "Global Macroeconomic and Financial Supervision: Where Next?"," NBER Chapters,in: Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, pages 364-377 National Bureau of Economic Research, Inc.
    9. Giulia Bonamini & Vincenzo D'Apice & Antonio Forte, 2015. "Inside European Financial Instability: Main Causes and Possible Solutions," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 44(1), pages 123-149, February.
    10. repec:onb:oenbmp:y:2018:i:q2/18:b:6 is not listed on IDEAS
    11. Michaela Ševčíková, 2014. "Proposals And Selected Measures Of European Union How To Deal With Financial And Debt Crisis," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 8(1), pages 1083-1096.
    12. Spahn, Peter, 2011. "Die Währungskrisenunion: Die Euro-Verschuldung der Nationalstaaten als Schwachstelle der EWU," FZID Discussion Papers 31-2011, University of Hohenheim, Center for Research on Innovation and Services (FZID).
    13. Przemyslaw Panfil, 2012. "The integration of the European government bond markets during the crisis," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 9(2), pages 13-26, June.
    14. Gómez-Puig, Marta & Sosvilla-Rivero, Simón, 2013. "Granger-causality in peripheral EMU public debt markets: A dynamic approach," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4627-4649.
    15. Beck Hanno & Wentzel Dirk, 2011. "Ordnungspolitische Überlegungen zu einer Insolvenzordnung für Staaten / Principles for an Insolvency Code for States," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 62(1), pages 71-100, January.

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