The Crisis in the Eurozone

This paper explores ideas for the implementation of systematic decisions of how to structure sovereign debt system in the EU and avoid future sovereign debt crisis. The two main difficulties that arise in a framework of the “European bonds” are how to ensure further sustainability of EU sovereign debt management (especially for high-debt countries) and how to convince virtuous countries to support the project and reduce the debt service costs. This paper suggests an approach for dealing with those issues, although this area clearly requires further work. While this paper concludes that the “European bonds” is a novel approach for improving sovereign debt management that is worthy of further research, it is only the first pass at the issue, and further research is needed before arriving at a definite conclusion. In fact, while bringing more benefits for countries with high debt levels, the ideas of the “European bonds” may become contradictory to the countries with the effective debt management practices. In any case, it will help to prevent future overborrowing and sovereign debt crisis. Moreover, an overall judgment of the “European bonds” will depend on the further development of sovereign debt management decisions of the EU institutions. The increase of EU countries sovereign debt is the pending scientific problem leading to the search of complex solutions needed for overcoming present sovereign debt crisis and restoring the trust of Euro as a currency of all European Union. The aim of the paper is to analyze the reasons of the present EU sovereign debt crisis and to assess the “European bonds” as possible measure for solving the EU sovereign debt control problem. Research methods applied – analysis of scientific papers and statistical data