"Issuance of Eurobonds (by Eurobonds I mean euro-denominated bonds issued by the ECB and guaranteed by all the member nations, not the traditional understanding of ‘Eurobond’, which is a bond issued in a non-domestic currency): This would spread the credit risk around the eurozone and, due to the currency in which the bonds are denominated and the underlying support from member nations, the market is likely to react positively to them.
Needless to say, the core countries (especially Germany, which has been firmly against the idea for a while now) would not be happy – and rightly so. It is like guaranteeing your prodigal sibling’s debts. It doesn’t give the wayward sibling any incentive to mend their ways. The proposal is likely to spark fierce political debate and public protest in the core nations and would be a tough one to get a consensus on." source
"The German government no longer rules out agreeing to the issuance of euro zone bonds as a measure of last resort to save the single currency, conservative newspaper Welt am Sonntag reported on Sunday." article reuters
"Mr Tremonti advocated proposals for the eurozone to issue new bonds backed by all 17 member countries, so-called euro bonds, which can be used to finance loans to financially stretched member states." bbc article
Do you think the issuing of Eurobonds will be the beginning of a Federal Europe?