That’s a weird problem to have. The US has a huge bond market in part because the US has an absolutely enormous amount of debt, and the bonds are the US debt. The EU doesn’t have bloc-wide debt, for better or for worse.

As an interesting thought experiment, imagine a central bank associated with a debt-free country issuing bond-like instruments. They would set an interest rate (perhaps with no auction, because they have no actual obligation to sell a predetermined amount, although an auction could still be used), sell bonds, delete the money used to buy the bonds, and issue new money to repay them with interest when they mature. This could be used as a way to act efficiently as a reserve currency and to exert a degree of control over inflation and the economy, kind of like how the Fed does it. The bonds would likely be considered extremely secure on account of the issue being entirely debt-free.

I would be surprised if the EU did this as such, since the EU probably does not want to be in the business of competing for capital with its own members, who do have a fair amount of debt that they need to finance.

[American perspective] In February I looked toward Euro bond markets as a safe haven for increasing Treasury yields, but the choices did not look good. For starters it appears to be impossible to even trade in foreign bonds with traditional brokerage accounts in the United States (hosted by E-trade, Morgan Stanley, Charles Schwab, etc).

Additionally, French bonds, while likely less-correlated with US Treasuries than other instruments, suffer from its own government having high debt levels; it's not a suitable safe-haven asset. Swiss and German bonds appear to be obvious alternatives. However, Swiss and German bonds' interest rates are low and in practice are little different than holding cash.

While gold appreciated in the short term, it is not simply inversely correlated with the value of the US Dollar. Its volatility is also driven by investors mitigating strict currency controls, mining productivity, and central bank activity. An unrelated downturn in one market could lead to a sell-off and wipe out gains. Gold also has no yield. Personally I think it's useful only in its physical form as a hedge for medium-term catastrophic events. Even then, a stockpile of food and clean water is likely far more valuable, if not substantially more difficult to store and maintain.

I ended up giving up, learning to love the S&P 500, and white-knuckling it ahead. Of the investable markets, the US one still generates the highest returns. (Chinese GDP growth is higher but its equities have low returns compared with other markets, due to political risk.)

> It has the economic size and stability but not the will right now.

The european union's GDP is a solid 50% behind the US (20 trillion vs 30 trillion). But more alarmingly the growth in the european union since the 2008 financial crisis has been totally anaemic: the growth doesn't even counter inflation and that growth only came at the cost of gigantic additional public debt. Meanwhile both the US and China's GDPs grew like mad.

I also dispute the stability of the EU: in many countries the people aren't happy at all and the far-right are winning elections everywhere. And it's only through tactics (like the center-right siding with the ultra far left in France to counter the far-right party who won the election) that parties that aren't the far-right are managing to prevent the far-right from reigning already.

For example in the European Parliament 36% of the 720 seats are for far-right parties. And that's after all the other parties colluding (including with the far left) to prevent the far right from having more seats.

And as people are more and more dissatisfied with the current situation in the EU, the far-right keep winning more and more voters (sounds familiar?).

> The Euro very well become a reserve currency in a multipolar world if Europeans decide they want to shoulder it.

The Euro is only 27 years old, is a badly conceived currency and may turn out to be one of the shortest lived currency ever. There's no way it's ready to take on the role of the USD. France's finances, the eurozone's 2nd biggest economy, are crumbling (gigantic public debt and insane public deficit) and may very well be overtaken by the International Monetary Fund (like it happened to Greece) soon.

Germany is trying very hard to ban its far-right AFD party from the elections for they know they could very well win. If I'm not mistaken the leader of the AFD said if they won, they're out of the EU. Think it cannot happen? UK left the EU already.

It's not just the EURO that may be the shortest-lived currency ever: the EU is actually in trouble.

Is it at all realistic to expect the stable and/or fiscally conservative countries to accept the high bond yields imposed by the more fiscally loose or perceived-risky countries? Could this ever happen without the EU centralising more control over fiscal policy?