Policy brief

Eurobonds: The blue bond concept and its implications

This paper revisits the Blue Bond proposal, published in May 2010. It discusses its implications and addresses some of the comments and criticisms re

Publishing date
21 March 2011

The Blue Bond proposal, published in May 2010 (Bruegel Policy Brief 2010/03) suggests that sovereign debt in euro-area countries be split into two parts.

The first part, the senior ‘Blue’ tranche of up to 60 percent of GDP, would be pooled among participating countries and jointly and severally guaranteed. The second part, the junior ‘Red’ tranche, would keep debt in excess of 60 percent of GDP as a purely national responsibility.

This paper revisits the proposal, discusses its implications and addresses some of the comments and criticisms received in response to the proposal.

This paper was prepared for the European Parliament’s Economic and Monetary Affairs Committee, session of 21 March 2011 on the interaction between bank and sovereign debt resolution. Copyright remains with the European Parliament at all times.

About the authors

  • Jakob von Weizsäcker

    Jakob von Weizsäcker heads the department for economic policy and tourism at the Thuringian Economics Ministry in Erfurt and is a non-resident fellow at Bruegel where he was resident fellow form 2005 to 2010.

    He previously worked at the World Bank in Washington (2002-2005) where he was country economist for Tajikistan and the Federal Economics Ministry in Berlin (2001-2002) where he headed the office of a junior minister. Before that, he worked for Vesta, a venture capital firm, and held research positions at the Center for Economic Studies in Munich and CIRED in Paris.

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