Is this "a federalized debt union in which eurobonds would be backed by all nations"?
Federalized European debt is necessary though.
Is this “a federalized debt union in which eurobonds would be backed by all nations”?
Yes it is. Spain is in dire need of this. If they can’t tap Germany’s creditworthyness, the 7% interest rate on Spanish borrowing will destroy the country.
All these bailouts, especially like the most recent Spanish one with no specific stipulations, are creating a future problem not often discussed. European interest rates will skyrocket as new debt is piled on old with no specifics as to who is to be paid back first. Lenders will require huge rates before doling out more cash to countries because they don’t know who is in line to be paid back before them and how long it will take.
Federalized debt is the only answer to this problem at this point. It is common sense in some ways, a monetary union without fiscal unity is going to, by nature, always be on shaky ground except in the absolute best of times when money is absurdly cheap.