research product . Other ORP type . 2020

Eurobonds (or Coronabonds) Would not Be Costly for Northern Euro Area Countries

Weber, Matthias;
  • Published: 16 Apr 2020
Well-designed eurobonds would lower financing costs for many euro area countries while hardly or not increasing the costs for the others. These bonds should have an explicit guarantee from the ECB. The bonds could be used up to a limit of GDP (a low number of 10-25% of GDP would allow to observe market reactions before deciding whether to expand). Their introduction would increase the costs on regular German 10-year bonds by at most 10 to 30 basis points.
free text keywords: economics, finance, HJ Public Finance, RA0421 Public health. Hygiene. Preventive Medicine, HV Social pathology. Social and public welfare. Criminology
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