The optimal policy for the Euro-zone - Natixis

Patrick Artus, chief strategist at Natixis, explained that creating a single euro-zone bond (which could be a synthetic bond based on the different government bonds) would increase demand for euro-zone bonds and the euro’s international reserve currency role.

Key quotes

"The share of the euro in global foreign exchange reserves is not very large in view of the euro zone’s economic and trade weight."

"If the euro’s international role increases thanks to the creation of a single euro-zone bond (possibly synthetic), the second step consists in using the additional capital inflows to the euro zone generated by this development to finance additional useful public spending."

"Conclusion: The euro zone and the euro could also have an 'exorbitant privilege'. We talk about an 'exorbitant privilege' for the United States and the dollar: the fact that the dollar’s dominant international currency role enables the United States to finance massive external debt and a high fiscal deficit without any difficulty."