Eurobonds as a Possible EU Response to the Current Economic Crisis

Master's Thesis from the year 2012 in the subject Economics - Finance, grade: 2, Vienna University of Economics and Business (WU Executive Academy at Vienna University of Economics and Business), language: English, abstract: The objectives of this Master's thesis were to develop a better understanding of the current economic crisis situation after the financial crisis of 2008/2009 and the subsequent sovereign debt crisis of 2010/2011 in order to provide a good solution as a possible EU response. The theoretical part of this thesis focused on financial systems with a general overview and in special answering the question 'Why is the efficiency of the financial system important for the economy as a whole'. Furthermore with some ground information to the current economic crisis - a combination of sovereign debt crisis, the euro project fault-lines and fragility of banks - this work gave some insights to the present difficult European situation and consequences for the EU. With a short overview of the current unsatisfactory situation at the European bond market and the debate on whether creating a common European bond market is useful brings the thesis into the main topic.The empirical part focused on the eurobond proposals and the common issuance of euro area Member States sovereign bonds. The aim was to gather an in-depth understanding of the main models and most discussed proposals and to point out the reasons that govern such need in order to solve the current economic crisis.In the summary of key findings these theories and proposals which were developed from different groups by presenting solutions in order to solve European problems were discussed. Based on these key findings (pros and cons) and in connection with my considerations the three main questions were answered: What could be the role of eurobonds in solving the current economic crisis? What could be the role of eurobonds within the euro area financial system? Could eurobonds be a durable and equitable solution for a common European bond market?At the end of this thesis there was given a future outlook.