Turning national growth-indexed bonds into European assets: A proposal to strengthen the euro area

The idea of growth-indexed bonds has recently regained momentum in policy circles, but research has shown they are unlikely to substantially decrease the risk of a debt explosion in advanced economies if not issued through a large and coordinated mechanism. This column, part of the VoxEU debate on euro area reform, proposes such a mechanism for the euro area – a European Debt Agency issuing securitised safe and risky European bonds backed by country-specific growth-indexed bonds.