Eurobonds for Germany and Italy: a win-win solution

Public debt is the burden over the shoulder of the Europe that is, and the Europe to come. Most of the southern European members (Spain, Italy, Portugal and obviously Greece) have an overhang level of debt largely exceeding their GDP. Consequently, is widely recognized that these economies are less resilient to shock and with less capacity to create an anticycle fiscal policy, both factors hampering the possibilities of growth (Checherita & Rother, 2010). That on account of what analyzed by Checerita and Rother (2010) on the sample of 12 European states between 1970 and 2010. A level of debt over than 90% of GDP (but in presence of a high private debt also near the 70%) has been deleterious on the level of growth compromising long-term private saving and investments, the only real shields against any looming economic shock. In view of this situation, and the economic crisis of 2008, the European institutions had created the European Stability Mechanism and the so-called Fiscal Compact. Following the concern of the governments, numerous investigations have focused their attention on the field. From one side has been addressed the efficacy of these two treaties in connection with their nature, with the former EU legislation on the theme and with the tasks performed by the Commission, the Council, and the European Court of Justice. From the other attracted much attention the nature of differentiated integration of the treaties, and its consequence in the implementation operated by the states (De Grauwe, 2016; Tosato, 2012, 681; Torres, 2010, 227; Besselink, 2012, 1; De Witte, 2012, 141). In connection also with the use of the highest legislative source, the constitutional, in order to ensure a certain level of stability, the most important difference with the former legislation, six and two pack, stability and growth pact (Stevanato, 2018; Saitto, 2016; Silvestri, 2013, 905; Bucci, 2012; Guazzarotti, 2017; Lupo, Rivosecchi, 2016, 113). The Italian case, particularly, has shown itself crucial in order to tangle the matter. In Greece, for instance, the economic approach has been criticized as unfit for the task (Guerrera, 2012, 2; Kriakopoulus, 2015, 34). In Belgium, those fiscal rules have been too generic and with no interconnection with the national institutional system (Vandenbruwaene, 2015; Lebrun, 2015; Joos, 2012). Hence since 2010 growth in popularity the idea of sharing the guarantee of bonds that will cover all or part of the European states’ public debt. Called mainly «Eurobond», those assets will in theory give the possibilities for the creditors to obtain their investment back from all of the Euro-governments and as a result the interests and ratings of those will be respectively lower and higher for south European countries. Whereas those tools have received widespread concern and reviews from the economic and political world, with harsh discussion about their capacity to solve the present and long-term crisis, little work has been done by the legal side. The masters of this game are however north European countries, whose reliability will be used as guarantee in order to increase the lower rating levels of the southern European ones. 1 The reason for an economic shock to come are many. Not least the new protectionist deal in the USA, the Brexit, the risk of a Greece default, finally is endemic in the capitalist cycle as shown by the recent economic history. In this study will be consequently developed the real question under that prologue: how a debt emission reform would be acceptable for Germany (for instance) and not seen only as a way to lower its debt rating and damaging so its how economic position?