Does Europe have the means to guarantee itself? Euro Zone States : a Community of Destiny

Following the European Council on 30th January last the issue was raised over the capability of recent European measures to provide the support required by Greece, Portugal and even Italy. The European Financial Stability Facility's (EFSF) loss of its triple A rating and the reticence of international institutional investors with regard to the co-funding option highlights the fragility of both the EFSF and the European Stability Mechanism (ESM), which will follow on. Based on the euro zone's profound economic and financial interdependence, a sound mutual support guarantee should rely on a community approach. Although long term Eurobonds are undoubtedly the best option, two other possibilities might be explored in more detail in the short term given the urgent nature of the situation: we might either combine the EFSF/ESM with a joint and several guarantee provided by the Member States or review the ECB's mandate to allow it to play its full role as lender of last resort.

ESO: Background Information: Rating agency warns EU, major banks on credit worthiness http://www.europeansources.info/record/rating-agency-warns-eu-major-banks-on-credit-worthiness/

ESO: Background information: European Financial Stability Facility (EFSF) http://www.europeansources.info/record/website-european-financial-stability-facility-efsf/

ESO: Background Information: Time Will Tell: The EFSF, the ESM, and the Euro Crisis http://www.europeansources.info/record/time-will-tell-the-efsf-the-esm-and-the-euro-crisis/

ESO: Key Source: The Euro Crisis http://www.europeansources.info/record/the-euro-crisis-key-sources/

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