The Great European Debt Breakup
Financial markets just threatened to break the eurozone, so the idea of harnessing the power of the market and of financial engineering to guarantee the euro’s long-term viability might seem paradoxical. Realizing the idea is why eurozone sovereign debt should be spit into senior and junior tranches – "Blue Bonds" and "Red Bonds."
BRUSSELS – Financial markets almost just succeeded in breaking up the eurozone. So the idea of harnessing the power of the market and of financial engineering to guarantee the euro’s long-term viability might seem paradoxical. But this is precisely what our proposal to split eurozone sovereign debt into senior and junior tranches aims to achieve.