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Questo articolo è stato pubblicato il 23 agosto 2011 alle ore 08:46.


2) The EFF with 1,000 billion of paid up capital could issue 3,000 billion of EuBs with a leverage of 3 and a 10-year (and beyond) duration at an interest rate of 3%, possibly variable rate after a certain period of time. There could be further guarantees with legal commitments from EMU member States. The 90 billion euro per year of interest charges, to date equal to some 1% of GDP of the EMU, would be payable with the profits from the equity conferred to the EFF, part of the VAT of EMU member States and with interests that we will talk about later. Obviously, adjustments can be made in terms of interest rates, maturities, refunds of the EuBs and maybe that they could be converted into shares. But this is the essence.

3) The EFF should divide in two parts the 3,000 billion raised with EuBs. In order to bring the average debt-to-GDP ratio of the EMU from the current 85% to 60%, the EFF should buy out 2300 billion of State bonds from EMU member States. This way, Italy’s debt towards the market would fall to 95% of GDP while the remaining 25% of debt would be towards the EFF. France and Germany’ debt/GDP ratio would drop to under 60% towards the market. The remaining 700 billion of this issue would go to investments in large European projects aimed at unifying and helping continental companies in the energy, telecoms and transportation sector, of which the EFF would become a shareholder, grow.

The advantages of this EuB issuance would be huge. We will cite just two: The first is that the EFF would not be opportunistic but rather a stabilizing factor in managing State Treasury bonds to hold on to for long periods of time, making speculation much more difficult. The second advantage would be having a unified market of large-scale EuBs and raising funds at lower average interest rates compared with those that national bonds of almost all EMU member States can obtain. Considering the nature of the EFF and of EuBs, which have real collateral, it would be realistic to attract very liquid investors like sovereign Funds that it is estimated have to date assets of some 4,200 billion dollars, or some 3,000 billion euro that no EMU member State issuance can cover if not just marginally. This way, EuBs can really become competitive compared with US Treasury bonds, which China wants to lighten up on.

Obviously, the EFF has to have a precise structure and corporate governance system (that could in part be taken from the EFSF and the ESM), including voting rights of EFF members, which, even though subject to their share in the capital, should be reviewed periodically in order to take into consideration by how much single States exceed the 60% debt/GDP threshold. This way, the different States would be pushed to bring down their debt/GDP ratio.
Summing up: this innovation should be planned immediately because, considering the legal terms of the EMU (and of the EU), the Eurozone is running serious risks. Those of speculation, of budget rigor with no growth and employment, of the Franco-German diarchy that took on itself the role of governing the EMU and the UE, while not being able to match up to a Government capable of the great political and institutional projects out in the past. (Traduzione di Yael Schrage)


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