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European Commission has proposed the introduction of united Euro-area bonds, joining the debt of 17 countries, as previous efforts to combat continuous crisis have failed. Germany, the flagman of the European economies, is strongly against such measures, as it is afraid of being stuck with returning other countries' debts. However, euro-bond advocates are much more optimistic, as overall euro-area Debt-to-GDP ratio of 85.4% is lower than the one of USA - 94.4%.
This proposal once again demonstrates the ineffectiveness of previous crisis-fixing measures, experts believe. Specifically, economists are worried whether EFSF will be able to convince investors that their lending to Europe's indebted nations is safe. Bonds issue is planned to be carried out without making changes in European Union treaty, requiring consent of all 27 EU countries, as only limited guarantees would be required from governments. On the contrary, EC representatives believe that a greater gain can be seen if all governments approved changes in the treaty and gave their guarantees to Euro bonds.
Currently Greece is the most indebted country in the Eurozone with a massive 144.9% debt-to-GDP ratio, fuelling the largest amount of concern. Besides PIIGS countries, skeptics saw France as the next one to fall last week, triggering new talks on the downfall of the EU as a political union.
This proposal once again demonstrates the ineffectiveness of previous crisis-fixing measures, experts believe. Specifically, economists are worried whether EFSF will be able to convince investors that their lending to Europe's indebted nations is safe. Bonds issue is planned to be carried out without making changes in European Union treaty, requiring consent of all 27 EU countries, as only limited guarantees would be required from governments. On the contrary, EC representatives believe that a greater gain can be seen if all governments approved changes in the treaty and gave their guarantees to Euro bonds.
Currently Greece is the most indebted country in the Eurozone with a massive 144.9% debt-to-GDP ratio, fuelling the largest amount of concern. Besides PIIGS countries, skeptics saw France as the next one to fall last week, triggering new talks on the downfall of the EU as a political union.