Eurozone bondholders should stay ‘on the hook’ – Dombret
Bonds issued by bailed-out governments should have maturity extended, argues Andreas Dombret
Holders of government bonds in eurozone countries receiving bailouts need to face market discipline, Andreas Dombret said on January 16.
Strengthening the role of the European Stability Mechanism (ESM) would be a “promising” policy, the member of the Deutsche Bundesbank’s executive council said in a speech in Hong Kong. But if states retained their fiscal autonomy, the eurozone will need “need further safeguards beyond rules alone”, he said.
Some states had been breaching the European Union’s
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