From a formal perspective it necessitates amending the EU Treaty – meaning it is very unlikely to be a short-term fix to the current challenges mainly related to recapitalisation needs in some banking systems, to political risks and to contagion effects within the euro area. The same is true regarding the proposed introduction of eurobonds.
This is where I respectfully disagree with Olivier Blanchard, the IMF chief economist, who was quoted as saying: “… the Germans had good reason to reject bearing the brunt of irresponsible policies by other states.