German Chancellor Angela Merkel and French President Nicolas Sarkozy kept a distance from the idea of a common sovereign euro zone bond on this week, with France hinting only that it could be a possibility in the very distant future.
But a Reuters poll shows a growing field of investors and economists say a common bond issuance would be the best — and perhaps the only — way of solving the debt crisis. In theory, it would allow highly indebted euro zone countries to regain access to commercial markets, while providing investors a safeguard through joint liability.
More than that, those analysts think Europe’s leaders may soon have to bow down to market pressures and issue a common bond as soon as 2012 or 2013.
It wouldn’t be the first time that policymakers caved to the markets.
In early August, after the European Central Bank looked like it would resume its Securities Markets Programme only to buy Portuguese and Irish bonds, one trader said:
“What’s going to stop us attacking Spain and Italy over the summer months? Because I can’t think of anything.”