alt Hacker NewsIt’s also part of the reserve currency dynamics. It’s not clear how the modern bond market will work in a post dollar world, we frankly don’t have an example.
It’s entirely possible that the EU can overcome the political struggles that a true EU bond brings about (I’d love to see how a bond would work that both the Hungarian and Danish and French and Greek governments would back long term) but it seems just as likely that each country will hold bonds in lots of countries, probably in some similar relationship to their trade imbalance.
But this is not some unmitigated win for the EU, there is just as likely to be really inefficient and riskier outcomes for everybody as there is some karmic punishment for the States for allowing Trump to run amok.
Indeed, this is both complex and risky, but it is fairly clear by now that we need to do something concrete rather than just yak about it. Hungary is indeed a problem (and has been for a long time) but I'm actually impressed with the restraint shown by the bloc to let Hungarians deal with this on their own terms as long as it does not stop the EU from handling foreign policy.
The trade imbalance angle is exactly the one that I think they will pursue because that is the one that can be made to work numerically, but great care should be taken to ensure that Germany does not end up with a disproportional amount of power. In a way the EU being fragmented but forced to work together is the best recipe for a fair outcome though the larger entities will probably always have some minor advantage in such constructs.