With the publication of the Green Paper on Stability Bonds today, the Commission is taking forward, in a structured way, the important debate on the joint issuance of debt in the euro area. By putting forth three options for such bonds and providing a detailed analysis of their financial and legal implications, the Commission is framing the debate, as well as setting out a clear timeline for the next steps.
The Green Paper on Stability Bonds analyses the potential benefits and challenges of three approaches to the joint issuance of debt in the euro area. The paper sets out the likely effects of each of these approaches on Member States’ funding costs, European financial integration, financial market stability and the global attractiveness of EU financial markets. It also considers the risks of moral hazard posed by each approach, as well as its implications in terms of Treaty change.