The Eurocratic 'Elites' seem to think that the issuance of a Bond guaranteed by all member states of the Eurozone would be the magic bullet that solves the sovereign debt crisis in Euroland and saves the Eurozone from breaking up. This may well be the case - for a while. But as economic and fiscal problems get papered over for a few more years the underlying tensions will only increase while those responsible for policy at the moment will have started to enjoy their well-padded retirement at the expense of their hapless taxpayers. The crunchtime will come when one of the states that have pledged to guarantee those 'Euro-Bonds' will no longer be able (or willing) to suffer from the burden of debt service. WE have (unfortunately successfully) argued back in 2004 that to accept bond spreads on Italian bonds that are just a tiny amount above the yields offered by German Bunds is a highly risky investment strategy. We hope - but are not confident - that we do not turn out to have warned in vain again.
When even seasoned financial commentators that usually display a certain amount of independent thinking argue that financial chaos is certain if Germany (and other 'northern' Euroland member states) don't continue to subsidise countries such as Greece, Ireland and Portugal one knows that the last vestiges of rational economic thought and any sense of democratic governance and financial responsibility is on the way out. Letting Greece or any other country go bust would certainly create difficulties in the short-term but the humongous financial resources (including central bank money created ex nihilo) would be much better applied to paper over the cracks in the financial system. In the long run this would be cheaper for the 'North' and the 'South' would either learn the lesson of good housekeeping once and for all or continue to slide further down the slippery slope of relative (and maybe absolute) decline in living standards.
The Euro has no democratic legitimacy, it is a construct created by (mostly unelected) bureaucrats, with unintended consequences (they are always the ones that count in the end).
Government spending in most countries is on an upward trajectory since early 1970s, no end in sight, in every election, in every country and from every party/politician you only hear about new 'projects', 'laws' etc that mean more spending.
But government can never spend 100% of the whole GDP, a limit will be reached and we are near it. Sooner or later those paying the bills will realise that more money does not buy more happiness in a finite life, why not make do and withdraw some of one's services.
That governments cannot cut 5 or 10 percent of GDP from their fiscal programs is an indicator for the lack of courage, best to cut all spending by an equal percentage, quick and avoids endless bickering.
Recommendation: avoid all banks in weak member states of the Eurozone, even check that any Euro Notes are not issued by central banks of these countries. Remember that 100 British Pounds in 1951 are worth only £ 4 in purchasing power today. It is a bit better in 'hard' currency countries but even worse in other countries. Germany's Mark (Euro) lost nearly 80 per cent of its purchasing power in the same period.