Weakening dollar, expensive promises: A sharp critique of IW chief Michael Hüther's plea for joint EU debt in the Focus article – Image: Xpert.Digital
The USA as a role model? Why Europe's dream of the "safe security" is so dangerous
Warning about the debt trap: Is Europe threatened by a creeping transfer union?
The end of Germany's interest rate advantage? What new EU bonds mean for us
Since the euro crisis of the 2010s, an ironclad rule has governed German fiscal and budgetary policy: no joint liability for European debt. But this taboo is beginning to crumble. In light of massive geopolitical upheavals, a huge need for investment in defense and infrastructure, and an increasingly politicized US dollar, a new debate is taking shape. Most recently, Michael Hüther, director of the German Economic Institute (IW), caused a stir: he is calling for a large, liquid market for European bonds – not as a first step towards the much-maligned transfer union, but as a strategic necessity to establish the euro as the leading global currency and reduce dependence on the US. But is this realistic? Critics warn against a "salami tactic," in which exceptions quietly become the norm, driving up the interest burden for financially sound countries like Germany. This is an in-depth analysis of fiscal path dependencies, the true lessons learned from the American Treasury market, and the far-reaching consequences that European companies must now prepare for.
IW Director Michael Hüther | Out of the taboo zone: Europe needs common debt
This analysis addresses the Focus article on the demand by IW Director Michael Hüther to break the German taboo against Eurobonds and to use the weakened dollar as a historic opportunity for joint European bonds. This proposal deserves criticism, not because the diagnosis of the capital markets is wrong, but because the headline places the burden of this opening on those who cannot afford to wait it out.
Stepping outside the taboo zone sounds like courage. It's primarily the language of convenience, spoken by those who won't bear the consequences. When the head of the German Economic Institute announces that Europe needs shared debt, it's not the dependent majority speaking. It's a position that has little professional repercussions from being wrong. The institute remains, the title remains, the next interview remains. What won't remain, if the scheme fails, is the untapped wealth of savers, contributors, and businesses, whose calculations aren't based on the rhetoric of a leading currency, but on interest, amortization, insurance premiums, and taxes. It is precisely this asymmetry that makes the formula economically irresponsible. It reduces a virtually irreversible systemic intervention to a mere mental exercise for experts.
Taboo is the wrong word here. A taboo would be an unfounded reluctance. Germany's resistance to joint liability was a rule born from the understanding that a currency without common taxing power (!) can only function if each country stands by its own debts. Those who treat this rule as taboo shift the burden of proof. Suddenly, it's no longer considered reckless to lump together other countries' balance sheets. Now, it's seen as reckless to ask about the lid. This is rhetorically elegant and institutionally cheap. It costs the author not a penny in liability, and the majority precisely the security they cannot diversify.
Joint bonds without joint liability
The euro is seeking a safe reference currency; Germany fears the habit behind the exception
Since the debt crisis of the early 2010s, one phrase has been sacrosanct in German fiscal policy: Joint European debt is the first step towards a transfer union. Anyone who utters it reflexively evokes memories of Greek bailout packages, TARGET2 balances, and the notion that Italian or French budgets could be refinanced using German creditworthiness. Michael Hüther, director of the German Economic Institute, deliberately broke with this notion in an article in Handelsblatt at the end of August 2026.He does not demand full liability for the entire mountain of debt held by partner states. He calls for a large, liquid market of joint bonds for clearly defined European tasks: defense, electricity grids, digitalization, and cross-border infrastructure. The impetus is not the old rhetoric of solidarity, but the state of the dollar.
It is documented that Hüther describes the loss of confidence in the American currency and institutions as a historic opportunity for the euro. From this, it can be deduced that the initiative is less a repetition of the euro crisis debate than an attempt to link monetary policy, capital market integration, and geopolitical autonomy in a single instrument. Under these conditions, it is conceivable that the political debate in Berlin will no longer revolve solely around the term "eurobonds," but rather around the question of whether Europe can even establish an independent monetary system without a common, secure currency. This very shift makes the initiative relevant for corporate management. It concerns financing costs, the depth of European capital markets, dependence on the dollar in trade, and the likelihood of indirect relief for national budgets.
The contract separates liability and market
The European Monetary Union was conceived from the outset as a construct without fiscal union. The Treaty on the Functioning of the European Union contains the so-called no-bailout clause. This prohibits the Union and its member states from assuming the liabilities of another member state. It was supplemented by the Stability and Growth Pact with its reference values of a deficit of three percent and a debt-to-GDP ratio of 60 percent. The economic logic was clear: whoever relinquishes control of monetary policy must bear the burden of fiscal discipline themselves. The capital market was intended to enforce this discipline through interest rate premiums.
The sovereign debt crisis did not abolish this architecture, but rather supplemented and, in some cases, undermined it. The European Stability Mechanism, bond purchases by the European Central Bank, and later the NextGenerationEU recovery fund have demonstrated that the monetary union is not prepared to allow individual states to go bankrupt unchecked in a systemic crisis. It is also clear that the formal no-bailout rule remains in effect. Political practice has, however, built around it by creating exceptions. This is precisely where the accusation of salami tactics arises. One exception, presented as a one-off, creates the next precedent. The rescue package becomes the recovery fund, the recovery fund becomes EU bonds for aid to Ukraine and defense, and temporary joint borrowing becomes a permanent issuer.
The available figures support this suspicion, though they don't yet prove it. The European Commission has announced an issuance target of around €180 billion in EU bonds for the entire year 2026, divided into €90 billion in the first half and €80 billion in the second half. According to the Commission, around €702 billion in EU bonds were outstanding at the end of 2025, in addition to short-term EU bills. By spring 2026, the Union's total outstanding debt had already reached around €790 billion, and by summer it had climbed to more than €820 billion. NextGenerationEU was designed as a temporary instrument following the pandemic. The final deadline for member states to submit payment requests is September 2026. In parallel, the Commission is financing other programs using the same unified funding approach. This demonstrates that Europe is already issuing joint bonds. The open question is not whether they exist, but whether a temporary portfolio will become a permanent, reliable benchmark.
Hüther's distinction is economically sounder than political language
Hüther insists on distinguishing project-related joint bonds from the mutualization of existing sovereign debt. The distinction is not semantic. Full mutualization would mean that Italy, France, or Belgium could refinance their existing debt at a common European interest rate. The spread as a price signal would then disappear. A project-related issuance, on the other hand, creates a new, joint asset without replacing the existing stock of national bonds.
It follows that the benefit for the euro as a leading currency depends primarily on the volume, liquidity, and legal certainty of the new security, not on the moral gesture of liability. A market that wants to compete with the American Treasury market must be deep, homogeneous, and readily tradable. At the end of the first quarter of 2026, according to Eurostat, total gross public debt in the eurozone amounted to just over €14.2 trillion, or 88.9 percent of economic output. Of this, more than €12 trillion was attributable to securities. That sounds like depth. In practice, however, this market is fragmented along national issuers: German government bonds, French OATs, Italian BTPs, Spanish Bonos. Same currency, different default risks, different repo capabilities, different investor groups.
The IMF's statistics on the currency composition of official foreign exchange reserves for the fourth quarter of 2025 show a dollar share of 56.8 percent and a euro share of 20.3 percent. In the first quarter of 2026, the dollar share was 57.1 percent and the euro share 20.0 percent. This order of magnitude has remained remarkably stable for years. The euro is clearly number two, but it has not yet reached the threshold at which central banks, sovereign wealth funds, and private reserve holders treat it as an equivalent parking instrument. Hüther, former ECB President Mario Draghi in his 2024 Competitiveness Report, ECB Executive Board member Philip Lane, and ECB President Christine Lagarde all argue along the same lines: An independent monetary system needs a liquid, reliable reference currency.
Berlin is holding back, and there are reasons for that
Chancellor Friedrich Merz publicly cites Draghi's diagnosis of competitiveness, not Draghi's financing proposals. The German position remains: joint debt only as an emergency measure, not as a permanent solution. Ifo President Clemens Fuest has formulated the strongest counterargument. Joint liability for all or a significant portion of national debt would destroy the incentives for fiscal discipline. If highly indebted countries are shielded from the pressure of the capital markets, the pressure for reform decreases. Fuest added that a genuine mutualization of national debt would effectively require stripping national parliaments of their budgetary powers. Without this transfer of authority, the construct remains unstable: liability without oversight.
The spreads are no coincidence. According to Eurostat, Italy's debt-to-GDP ratio was 137.1 percent in 2025 and, according to preliminary figures, 138.9 percent in the first quarter of 2026. France's was 115.6 percent in 2025, Belgium's 107.9 percent, and Spain's 100.7 percent. Germany's was 63.5 percent in 2025 and 64.4 percent in the first quarter of 2026. The market is pricing in these differences. A common bond doesn't eliminate them; it merely shifts them. Either the better-off countries subsidize the worse-off ones through the common coupon, or the common bond remains so small and so strictly earmarked that it fails to meet the requirements of a leading currency. This very conflict of objectives is often overlooked in public debate.
Germany also provides a prime example of fungibility. The €500 billion special fund for infrastructure and climate neutrality was intended to enable additional investments. The ifo Institute calculated that in 2025, the federal government incurred €24.3 billion in additional debt through this special fund, while actual investments increased by only €1.3 billion compared to 2024. The misappropriation rate in this analysis was around 95 percent. The German Economic Institute (IW) arrived at 86 percent. The methodologies differ, but the direction is the same. Money is malleable. Those who jointly finance defense can reduce national defense spending and redirect the freed-up funds to social programs, subsidies, or tax breaks. An exception becomes the norm as soon as political cost accounting suggests it.
What clearly speaks in favor of a German "no"
Three structural reasons support Germany's continued refusal to consider comprehensive debt mutualization, even though it has already accepted project-related EU bonds.
First, the incentive structure. As long as national bond markets exist, a residue of market discipline remains. It is imperfect because the European Central Bank intervenes in crises and because banks back their own government's bonds with little or no equity capital. But it is not zero. A large joint statement with implicit joint and several liability logic weakens this signal. Experience with European fiscal rules is sobering. Rules that are regularly suspended, reinterpreted, or politically renegotiated do not replace a market price.
Secondly, creditworthiness. Germany finances itself more cheaply than the average in the monetary union because investors attribute a higher probability of repayment and lower market liquidity to the federal government. A creeping liability union cannot maintain this advantage without cost. The national debt turnaround has already shifted the interest burden in the federal budget. According to reports on the federal government's financial planning, interest payments will rise from a low of around four billion euros during the period of low interest rates to almost 42 billion euros the following year and, in the long term, to more than 80 billion euros in 2030. Under these conditions, it is conceivable that any additional European liability expectations could translate into a risk premium on federal bonds.
Thirdly, there is the logic of the constitution and parliament. The German Bundestag holds the power of the budget. In its rulings on the euro crisis, the Federal Constitutional Court set limits on unlimited liability assumptions. Automatic, open-ended joint borrowing without the right of national parliaments to reclaim the funds would represent a systemic change, not only economically but also institutionally. Hüther's proposal attempts to avoid this change by emphasizing projects, conditions, and caps. The history of European funds teaches us that caps are negotiable as soon as the next shock occurs.
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The dollar comparison only contributes half the story
The core of Hüther's argument is this: the euro lacks a counterpart to the US Treasury bond. This is a correct market observation. The Treasury market is the deepest and most liquid government bond market in the world. It serves as a reserve, as collateral in repo transactions, and as a benchmark for corporate bonds, mortgages, and derivatives. Any currency that aspires to be a leading currency needs not just a unit of account, but a parking instrument.
The US remains a problematic example. It is documented that the total national debt of the United States exceeded $40 trillion in August 2026. Publicly held debt stood at approximately $32 trillion. The debt-to-GDP ratio, measured as a percentage of total federal debt, hovered around 123 percent at the beginning of 2026. The Congressional Budget Office projects a deficit of $1.9 trillion for fiscal year 2026, a public debt-to-GDP ratio of 101 percent, and net interest payments exceeding $1 trillion. By 2036, this projection increases interest payments to $2.1 trillion, or 4.6 percent of GDP, and public debt to 120 percent. This is hardly a picture of fiscal virtue.
This does not mean that the Treasury market will collapse tomorrow. It means that the size and liquidity of a safe security do not cure the underlying fiscal problems. The convenience yield—the interest rate advantage that investors accept for liquidity and security—has allowed the United States for decades to finance deficits at a price that a comparably indebted country without a reserve currency could not have obtained. This is precisely what critics call the exorbitant privilege. It lowers the immediate cost of financing while simultaneously increasing the incentive to further expand debt.
The problems for which US Treasury bonds are partly responsible lie less in the paper itself than in the political economy that enables it. First, foreign reserve holders and the global demand for safe dollar investments finance part of the American budget deficit. The discipline that the market would impose on a mid-sized nation takes effect with a delay. Second, the periodic wrangling over the statutory debt ceiling creates artificial default risks in an instrument considered risk-free. This undermines confidence without limiting structural debt. Third, trade, sanctions, and industrial policies can use the dollar as a tool of power. It is precisely this geopolitical use that makes reserve holders nervous and is the empirical core of the thesis of lost confidence. Fourth, the risk of fiscal dominance increases: the higher the interest rate component of the budget, the greater the political pressure on the central bank to keep yields low.
Are Treasuries therefore easily misused to expand debt behind the backs of voters? Partly, yes. It's well-documented that large portions of American spending are dynamically determined by law, while tax cuts and discretionary programs operate through deficits. Voters see performance, not net present value. The Treasury market makes this shifting technically easy because it always appears receptive. The assertion that the US is virtually bankrupt is nevertheless an exaggeration. A state indebted in its own currency, whose bonds serve as global collateral, and which has a low tax base is not insolvent in the corporate sense. It is vulnerable to inflation, abrupt yield spikes, and the gradual erosion of privilege. For Europe, this leads to an uncomfortable lesson: A European Treasury equivalent would create similar incentives without automatically replicating the American advantages. Europe lacks a comparable military and financial power architecture, a unified federal budget, and a unified tax policy.
What companies need to learn from the debate
For industry, energy, logistics, and digital infrastructure, this debate is not merely an academic exercise. A deeper market for common European bonds could create a clearer benchmark interest rate, unify swap markets, and make cross-border corporate financing cheaper. European savings, which currently flow largely into American assets, could be more likely to remain within the European currency union. A more internationally used euro would lower dollar hedging costs in commodity and foreign trade.
At the same time, new risks arise. Joint defense and infrastructure programs shift public demand. Defense, network, and digital companies benefit when additional funds flow in. They lose out when national budgets merely relabel existing ones. Location decisions depend on whether joint funds are tied to reform requirements, local value creation, and reliable procurement. Experience with the recovery fund demonstrates both: noticeable investment impulses in individual countries and, at the same time, implementation bottlenecks where administrative and planning capacity is lacking.
Regulation remains the underestimated lever. Without progress on banking and capital markets union, even a large volume of EU bonds will remain an isolated segment. As long as banks hold national government bonds as virtually risk-free, the interconnectedness of the state and the banking system remains the real stability risk of the monetary union. A common, safe security can loosen this interconnectedness if it partially replaces national bonds on bank balance sheets. It can exacerbate it if it is further accumulated while national holdings remain untouched.
Three under-examined mechanisms
First, the bank-sovereign relationship. In public debate, Eurobonds appear as a foreign policy or monetary policy tool. For financial stability, however, what matters most is which security banks, insurers, and pension funds hold as safe investments and collateral. As long as Italian and French banks hold a disproportionately high number of domestic government bonds, every spread shock will remain a banking problem. A joint bond will only change this if supervision and equity capital regulations break the incentive for patriotism. This regulatory aspect is usually ignored in the rhetoric surrounding the leading currency.
Secondly, there's the difference between safe securities and fiscal capacity. The US can issue Treasuries in almost unlimited quantities because the federal government levies taxes, the central bank operates in the same currency, and the political center, when in doubt, prioritizes debt servicing. The EU doesn't levy any significant taxes of its own. It services its bonds from the Multiannual Financial Framework, i.e., from contributions by member states. This is legally sound as long as the member states pay. It's not a functional equivalent to the American federal government. A larger volume of EU bonds without its own revenue base increases its dependence on the next budget compromise.
Thirdly, European savings. Europe is generating persistently large current account surpluses. Part of these savings finances American deficits and thus precisely the Treasury market that Europe now wants to replicate. A weak euro bond market could keep some of these funds within the currency union. However, it would also push European yields down and asset prices up. For companies, this makes equity and debt financing cheaper. For insurers and pension funds, it makes it more difficult to find current interest rates. The distributional consequences of a reserve currency strategy are rarely discussed.
This thesis does not hold up under every condition
Hüther's central claim is that Europe must now capitalize on the dollar's loss of confidence and accept joint bonds on a new scale. This thesis is untenable unless three conditions are met.
It won't help if the dollar retains its privileged position. IMF reserve statistics so far show not a flight, but a slow, incomplete diversification. Gold and other unidentified currencies are gaining ground, while the euro has stagnated by a fifth. A political shock in Washington could prompt reserve holders to reallocate their assets. They don't necessarily have to do so permanently as long as there's no equivalent alternative and as long as the dollar market remains weak.
It is ineffective if joint emissions do not discipline national budgetary incentives but replace them. As soon as member states substitute their own investment spending with European loans, no additional European capacity is created, but rather a shift in liability. The German special fund is the current proof that earmarking funds on paper and additionality in practice are two different things.
It won't work if Europe fails to credibly enforce its own rules. Hüther links cheaper common currency to stricter budget rules and reform requirements. That's the economically consistent trade-off. Historically, it's the weakest point of the monetary union. Rules that are suspended during recessions and politically redefined during booms don't generate a sustainable interest rate advantage. They create expectations for the next fund.
A qualification is essential. The alternative to joint bonds is not the pure market discipline of a textbook monetary union. This discipline has already been undermined by bond purchases, the bailout mechanism, and implicit expectations of mutual assistance. A categorical German "no" does not change the existence of EU bonds; it merely limits their duration and volume. Conversely, a project-specific "yes" does not automatically alter the international role of the euro. Integrated capital markets, uniform insolvency rules, deep securitization and equity markets, and, above all, growth are lacking. A safe security without productive use remains just another debt instrument.
Salami tactics are not a conspiracy, but a path
The term "salami tactic" implies intent. A more reliable diagnosis is that of a path dependency effect. Every crisis generates an instrument that is formally temporary but remains institutionally in place because repayment, refinancing, and market management require a system. The Commission has become more professional as an issuer, order books are full, and the Green Bond tranche is established. Markets are getting used to the name EU Bond. Politicians are becoming accustomed to the possibility of shifting national distributional conflicts to Brussels. This is not a secret strategy, but rather the normal economics of precedent.
Therefore, the German position is not irrational, even if it is incomplete. It defends a principle that is already riddled with holes in practice because the principle still determines the negotiating position in the next round. Anyone who treats every new instrument as a mere technicality relinquishes the leverage with which conditions, caps, and repayment schedules can be enforced. Anyone who denounces every instrument as a systemic change ignores the fact that Europe is already collectively creditworthy and that defense, networks, and border protection are genuine European public goods.
Eurobonds: Why “together” can be riskier than experts say, and how silent path dependencies such as exceptions to the debt union are becoming commonplace
The crucial weakness of the entire Eurobond debate does not lie in this or that percentage point of the reserve statistics. It lies in the difference between what can be observed in the market today and what happens after institutional liberalization. Analyses by Hüther, Fuest, Draghi, or the Bundesbank describe the current situation with high precision: spreads, liquidity, reserve ratios, interest burdens, and misappropriation of special funds. However, it does not follow that these same models reliably predict the effects of a new liability and issuance regime. They calibrate the present. The future of a systemic change remains a different matter entirely.
This is not a populist objection to expertise. It is the core of economic policy responsibility. Joint bonds are not a laboratory experiment with limited damage. They impact the asset position of savers, the refinancing of banks and insurers, the sustainability of pension funds and retirement schemes, and the tax burden of future generations. A later admission that the incentive effects were underestimated will not affect the expert, but rather households whose financial flexibility is already constricted by interest rates, inflation, and demographics.
What can be known, and what can only be asserted
What is robust are mechanisms, not equilibria. The fungibility of money is one such mechanism. Whoever finances a European expenditure can cut a national one. The ifo Institute demonstrated this in 2025 using the German special fund as an example: Additional loans led to only a fraction of the additional investment. This finding requires no prophecy. It follows from the simple fact that households are interconnected. Equally robust is the incentive logic of market discipline. An interest rate premium signals risk. If this signal is removed or dampened through implicit liability, the price of debt falls for those who increase it. This is not speculation about Italy in 2035. This has been public finance science for decades.
The scope, pace, and political processing of these mechanisms remain unknown. No one can reliably quantify how quickly a project-specific exception will become a refinancing instrument for existing debt. No one can name the next crisis that will burst the bubble. No one can predict what gap between the earmarked funds in the prospectus and their actual use in national budgets courts, the Commission, and the Council will allow to pass. This very gap is Pandora's box. Not because someone has secretly decided on a transfer union, but because institutions under pressure do what they were built to do: they seek the path of least political resistance.
The path is no less harmful than the intention
The formulation that salami tactics are not a conspiracy but a development path sounds reassuring. It isn't. A path without a right of reversal is more dangerous for those affected than an open conspiracy. A conspiracy can be identified and rejected. A path creates tangible realities. NextGenerationEU was a temporary measure. Nevertheless, the Commission has become a permanent debtor, with hundreds of billions of euros being issued annually and an outstanding volume approaching trillions in just a few years. Every new tranche is justified by the previous precedent. The market gets used to it. The administration gets used to it. The politicians get used to it. In the end, there isn't the grand decision of "we mutualize national debt," but rather the realization that it has already been done in practice.
Under these conditions, it's conceivable that the very focus on defense, networks, and digitalization that Hüther emphasizes could become the lever, not the brake. Public goods of this kind are chronically underfunded, morally difficult to challenge, and scalable. Defense has no natural upper limit once threats are politically defined. Infrastructure can be structured in such a way that almost any national measure sounds European. Digitalization is a catch-all term. Those who choose to enter the discussion via such headings are choosing the most flexible one.
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The American example intensifies the warning instead of weakening it
Anyone who invokes the Treasury market as a target model must also consider its downside. The depth of this market has not disciplined the United States. It has made deficits technically easy. Publicly held federal debt is in the range of $32 trillion, total debt will exceed $40 trillion in 2026, and net interest payments, according to projections by the Congressional Budget Office, will reach more than $1 trillion in the current fiscal year. The privilege of being considered risk-free has shifted the political cost-benefit analysis: benefits today, liabilities as debt holdings. Voters reward visible spending. They rarely reward the present value of interest compounding.
With a large, joint bond, Europe would import the same incentive without possessing the same state infrastructure. The EU lacks the fiscal power of the American federal government. It services its bonds with contributions from member states. This sounds legally robust as long as everyone pays. It becomes fragile as soon as a large net contributor experiences a political shift or a large net recipient weakens the conditionality. Models that transform the current spread between the federal government and the BTP (Border Transactions Project) into a single curve implicitly assume that this political conflict will remain manageable. This is an assumption, not a finding.
Responsibility begins where forecasting ends
Professorial titles do not create liability for error. This is precisely the scandal that critics rightly identify, provided they don't allow it to descend into anti-intellectual rhetoric. Expertise is indispensable for identifying mechanisms. It becomes irresponsible when it obscures the transition from understanding mechanisms to guaranteeing the system. Phrases like "clearly defined projects," "stricter rules in return," or "no entry into a debt union" are not descriptions under conditions of uncertainty. They are promises about the behavior of future actors. Future actors face, among other things, pressure, different majorities, and different crises.
A minimum level of integrity would consist of treating uncertainty not as a residual category in the last paragraph, but as a decision-making factor. If the potential harms are asymmetrical—limited benefits in the form of somewhat lower financing costs and somewhat higher euro reserve shares versus a virtually irreversible liability alliance—decision theory argues for a high burden of proof on the proponents. Irreversibility exacerbates this burden. Debts can be legally discharged. Expectations of support cannot be withdrawn without frightening a market that has just been established.
What the opposing position is nevertheless not allowed to do
Unpredictability does not absolve us of the responsibility to also evaluate inaction. A categorical "no" also has unknown consequences: fragmented capital markets, a continued outflow of European savings into the dollar zone, higher costs of shared public goods, and potentially more unilateral national actions regarding debt already incurred by the federal government through special funds. Ignorance is neither a license for inaction nor a license for openness. It is an argument for experiments with a rollback clause, a strict volume cap, independent assessment of additionality, and automatic termination if substitution is demonstrated.
Precisely these kinds of safeguards are, in practice, the weakest link in any European construct. Anyone who knows this and yet speaks as if earmarking funds were a mere technical detail is treating other people's assets like a theoretical assumption. This is the real critique of the current debate: not that economists are taking a stance, but that they are linguistically blurring the distinction between a well-suited analysis of the present and an uninsurable future impact.
The problem isn't the term "Eurobonds." The problem is the habituation to the idea that exceptions replace the framework and that no one is personally liable for breaches of that framework. As long as this asymmetry persists—concentrated intellectual gain through visibility, socialized wealth risks through path choices—skepticism isn't obstruction. It's the only appropriate stance toward an instrument whose consequences no one knows and whose flaws can't be rectified with a postscript.
This leads to a sober assessment of the location question
Joint bonds can make future European investments cheaper and accelerate capital market integration. They can also delay national reforms, shift liability risks, and increase the interest burden on more fiscally sound states. The American Treasury market demonstrates both simultaneously: unparalleled liquidity and a debt policy intoxicated by this privilege. Europe would do well to study the former and not copy the latter. Hüther has opened the door to this taboo subject. The crucial question is not whether the euro needs a safe-haven asset. It is under what institutional constraints such an asset can generate additional European benefits, instead of merely taking the next slice of a sausage that's already on the table.
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