The EESC considers that the euro problem is primarily political rather than economic. On the other hand, recent responses from the Commission and the Council suffer from an extensive "democratic deficit" in by-passing the European Parliament and other Union institutions and does not take into account the common commitment to solidarity and cohesion.
The EESC therefore advocates the introduction of two complementary but distinct EU bonds: Union Bonds for stabilising debt, and Eurobonds for recovery and growth. The EESC recommends also the use of a share of the net inflows into Eurobonds to finance a European venture capital fund, which was one of the design aims of the European Investment Fund (EIF). This solution would not require any modification of the Treaties.
Union Bonds – gradually converted national debt of up to 60% of GDP to Union Bonds -could be held in a consolidated but untraded debit account and not be traded: Member States whose debt is held in Union Bonds would service their share of them.
Eurobonds issued to finance recovery and growth would be traded and could attract funds into the EU from the BRICS - Brazil, Russia, India, China and South Africa – economies. This could strengthen the euro as a global reserve currency and help the emerging economies achieve their ambition for a more plural global reserve currency system.
Moreover, cohesion would be increased and competitiveness would be boosted, with a share of the capital flows attracted by issuing Eurobonds financing a venture capital fund for small and medium-sized enterprises.