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.
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