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Europe’s `Safe Bonds’ Are Not So Safe After All

Ferdinando Giugliano, (2018), “Europe’s `Safe Bonds’ Are Not So Safe After All”, Bloomberg, 22 Μarch

Call it the Holy Grail of the euro zone. Ever since the financial crisis, economists have been seeking ways to create a safe financial instrument, which banks in the single currency area can buy without having to load up on domestic sovereign bonds. Many placed their hopes in the proposal of a bundle of sovereign bonds called “European Safe Bonds” (ESBies); but that looks set to disappoint.

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