As long as we do not have a political federation with a federal budget,  BIS central bankers’ speeches  3  this would create an incentive problem. It would impair the incentives for fiscal prudence at the domestic level. Consequently, Eurobonds would be the natural counterpart if national fiscal competences were clearly at the level of a union which would be a federation.
First, the global economy has encountered a crisis more frequently in the past 20 years than before. Second, the current crisis has grown literally into a global crisis. The global economy has contracted sharply since the fall of 2008, as often described as falling off a cliff.