> In fact, one of the Eurobonds proposals was that states use European bonds up to some threshold (60% debt-to-gdp ratio level was proposed), and have to rely o

> In fact, one of the Eurobonds proposals was that states use European bonds up to some threshold (60% debt-to-gdp ratio level was proposed), and have to rely on national bonds to cover the rest. Yes, these are valid points. My impression though, is that a better thing to focus on is not financing but who pays for what. In the U.S. the Federal government pays for social insurance, federal defense and big infrastructure projects. The states pay for education, police, and local infrastructure. It is because the U.S. states do not pay for social insurance that allows them to weather unequal income distributions and that is why poorer states consistently get more spending. The whole point of social insurance is that poorer people get more and richer get less, so it's the opposite of per GDP spending. For example, when states like California start trying to take on social insurance roles, that's when they get into a lot of fiscal trouble. So now the problem with Europe is that the states do need to pay for social insurance, and that's a killer. There is just no amount of Euro bonds that will be able to help because the poorer states have a lower GDP per capita but the bonds will be capped at a share of GDP, which is the exact opposite of how social insurance works. Therefore you can clean up Europe's finances if there is a central government that pays for social insurance. Defense spending is relatively minor in comparison to social spending, so you can keep that per state if you want. But once you federalize social insurance, then you can still do some GDP ratio debt limits and be OK, and it doesn't matter too much what happens with per-state financing once this burden is taken off states' books. Of course this requires real solidarity. And it seems that Western Democracies have been doing everything they can to destroy real solidarity. But that's a whole other discussion. At least that's my take.