"Germany must be forced out of the Euro Monetary Union" this would fix everything lol Am I right sheda?
What kind of mind set deals in terms of "fixing everything" with a single action? If you want a magic wand go see harry potter, if you want to work with the mess that's there you have to do so by removing the misfit and that's just for a start, what is remotely funny about it? Because germany pays into the zone its some how above scrutiny? This attitude only goes to show how much the entire project is about germany, laughable it should leave even though that would create the biggest benefit to the zone, laughable...
It is nothing but semantics depending on who says goodby to who. What should happen, but probably won't for some time, is that France, Spain, Italy, Portugal and Greece should say goodby to Germany. This really wouldn't be forcing Germany to do anything in particular, but it is the near equivalent of forcing them out of the EMU. I believe that if the PIGS and France were to insist that if Germany does not drop their opposition to the eurobond they will all exit together and form a new monetary union with both a common currency and a common bond, that under that kind of pressure Germany would agree to the eurobond. Unless Germany agrees to a common bond, it is a virtual certainty that eventually the PIGS will leave the EMU, and quite likely France will go with them. This would not necessarily mean however that these countries would leave the EU, just the EMU. What would result is a Germany left in the EMU together with the fledgling States that are not yet full members. That would leave Germany in a somewhat precarious position and they would obviously do something about that, but what? I am happy to go on record as saying that the present EMU can not last much longer without a common bond. No more than a decade I would think. The PIGS will eventually tire of permanent recession and having to grovel for more high interest, German Care Packages. The pressure is going to continue to build in favor of a common bond.
Does the US or some state like New York guarantee Mississippi general obligation bonds? And if you tell me that states like New York fund Mississippi, then maybe you could explain why Mississippi needs to issue bonds?
What does this have to do with the need for a eurobond? Mississippi and New York use the same currency and that currency is linked to a single bond: United States Treasury bonds.
You mean that if there were eurobonds, Greek debt would suddenly be rated as highly as a state bond in the US? How so? If there were a eurobond, Greek debt would still be valued on Greece's ability to pay, just like Mississippi's debt is valued on its own ability to pay when there are US treasury bonds. The US treasury does not guarantee Mississippi bonds and the eurozone would still not guarantee Greek bonds if there were eurobonds.
I was going to point out how hilariously silly and uniformed this commentary was, but fhl beat me to it.
I'm not here to teach either you or Tao how monetary policy is adjusted by central banks using bonds nor, how this ties into interest rates and the health of a country's economy. There is ample, detailed information about this on the internet if you are interested. If there was a common bond, the euro bond, the Treasuries of all countries in the EMU would pay the same rate for borrowing. A common bond is an essential requirement for a well functioning ECB.
No. If Greece offered bonds denominated in euros, it would not automatically get the same rate as a eurobond that was offered by the entire eurozone, any more than Mississippi would get the same rate as a US treasury bond. The ez was supposed to be about getting france and germany together so there wouldn't be any more wars, but now the truth comes out that the only reason the socialist countries really wanted to get together is so they could tax germans and live off their success. And if germany won't go along, then they want germany out and that business about war prevention is shown to just have been made up to sell the whole thing.