According to German Chancellor Angela Merkel, the issuance of a euro bond would repeat past mistakes.
To force one single interest rate by means of eurobonds politically, which already have not worked on the markets, would be repeating of an old mistake and not the lesson learnt from experience.
This announcement, before tomorrow's EU summit, will set the tone for the conference. I see Germany holding its economically conservative position. I also see the PIIGS + France begging for money. In the end, I imagine a lot of people will be disappointed with conference outcomes.
"The summit can only disappoint, in the sense that the markets want a quick fix," said Andreas Utermann, global chief investment officer at Allianz Global Investors. "There is no quick fix for this."
Harvard professor, Niall Ferguson, believes that a quick (and lasting) fix is exactly what Europe, and the world, needs.
“The key negotiators, including the German chancellor, do not really understand the timeframe we’re working under,” Niall Ferguson, a professor of economic history at Harvard University, said at a conference in London. “The timeframe for financial crises is days. The timeframe for structural reforms is years.”
The summit will at least provide some more information about plans for future EU integration. A lot of the focus will be on Spain's and Italy's current problems. I just hope we will get some interesting news on a future banking and/or fiscal union.
Does anyone else think the EU, at least in its current form, is destined to fail? A lot of EU action in the past two years has been a continuation of the kicking the can down the road strategy. The political, economic, and especially cultural differences between many of these countries are just too great for any real form of integration (cultural differences can explain politics and economics). Why would a country like Germany share a currency with a country like Greece? German's like to build nice cars, while Greek's enjoy torching the offices of job providers.