欧洲金融稳定机制（European Financial Stability Facility，简称EFSF）于去年危机爆发伊始成立，目前正通过发行债券来帮助向周边国家提供救助基金，但是并未在二级市场购买这些国家的现有债务。如果要执行新的方案，欧洲需要赋予欧洲金融稳定机制更多的权利并大幅增加其7，500亿欧元的欧元授权额度。本周，德国勉强表示这一做法将有可能得到实施。
这个融资机制的工作模式与美国在金融危机顶峰时所实施的不良资产救助计划（Troubled Asset Relief Program，简称TARP）相似。但是欧洲金融稳定机制买的是不良主权债务，不是问题银行的不良抵押资产。人们对于欧洲金融稳定机制赎回主权债务的价格还存在争议，但是大部分认为该价格会向当前已然低于面值的市场价看齐。赎回之后，欧洲金融稳定机制将不再计较债券的价格差额，并最终削减周边国家的债务，藉此让他们赢得喘息之机。
Investors are pushing the panic button as the European debt crisis spins out of control. Banks around the world are trying to calm their clients' fears, setting up special conference calls and one-on-one sessions, but there seems to be nothing they can do at this point to prevent a rush for the exits.
While analysts acknowledge that the problem is severe, they also believe that there could be a way out of this mess, with some calling for a massive European bailout mechanism, similar to the one set up in the U.S. at the height of the financial crisis. Most agree that European governments need to act collectively and in short order, before this contagion causes irreparable damage to the economic fabric of the continent.
Each passing day seems to bring more sour news out of Europe. On Monday the yield on 10-year Italian sovereign bonds jumped from around 4% to 6% as investors dumped Italian debt. Moody's later downgraded Ireland's sovereign debt to below investment grade, or junk, sending yields on their 10-year bond to a record 14%.
Brokers and investment advisors are trying to assuage their clients' fears, but most portfolio managers just want to dump anything associated with the peripheral countries of Europe. Things have gotten so bad that it now costs more to insure the sovereign debt of Portugal and Ireland using credit-default swaps than it does to insure the debt of Venezuela.
The threat of contagion has emerged as a "clear and present danger" in the European fixed income market, a senior manager at Credit Suisse told investors on a special fixed income conference call Wednesday. "Our view is that this issue needs to be tackled aggressively and soon by authorities to avoid a real threat to global financial stability and growth."
The Europeans have been trying to manage the sovereign debt crisis for over a year now with only marginal success. The policy has been to treat the symptoms of the contagion rather than to find a cure for it. That methodology might have worked for a few years if they only had to contend with bailing out Greece, Portugal and Ireland. But now that the crisis threatens to take down Italy and its 1.8 trillion euros ($2.6 trillion) debt pile, the Europeans need a more lasting solution.
Analysts and investors feel that the time has come for the Europeans to face the music and decide how far they are willing to go to preserve their monetary and political union.
Will Europe choose stronger political and economic integration or will it choose disorderly disintegration? The current crisis illustrates that fiscal decisions made at the state level need to be in harmony with monetary decisions made by the EU central bank. To achieve this balance, nations in the eurozone would need to give up sovereign control over much of their economy – something that in the past was unthinkable.
But the bailout packages for the peripheral eurozone nations have in essence done just that. To get the loans, Greece and Portugal had to meet certain fiscal targets by cutting spending and selling off assets. The "core" European nations, namely France and Germany (along with the IMF), are now essentially calling the shots in the peripheral nations, which is tantamount to a temporary transfer of sovereignty. Investors would like this temporary economic arrangement to become more permanent, thus requiring the eurozone to come together in a much stronger political and fiscal union – no easy task.
But it's unclear if the Greeks and Portuguese are willing to have nearly all their state-level decisions made by foreigners in Brussels and Frankfurt forever. And it's equally unclear if the Germans and French are willing to permanently merge their balance sheets with those of the peripheral countries.
Investing in eurobonds
For now, the current European bailout fund needs to be greatly expanded in both size and scope.
The plan being floated around the halls of Frankfurt at the moment calls for the rich countries in Europe, namely Germany and France, to issue some sort of collective bond to help pay off the debt of the peripheral countries.
The European Financial Stability Facility (EFSF), set up last year when the crisis first flared up, currently issues debt to help fund the bailouts of the peripheral countries, but doesn't buy up their existing debt in the secondary markets. For this new plan to work, the EFSF's role and its 750 billion euro mandate would need to be greatly expanded, something the Germans this week reluctantly acknowledged could happen.
The EFSF would create a new "Eurobond," as Credit Suisse (CS) is calling it, to help finance the acquisition of billions of euros worth of peripheral sovereign debt held by private investors. Those investors looking to get rid of their peripheral sovereign paper would now have a willing buyer in the EFSF.
Such a funding mechanism would work similar to how the Troubled Asset Relief Program, or TARP, worked in the U.S. at the height of the financial crisis. But instead of buying bad mortgages off the books of crippled banks, the EFSF would buy bad sovereign paper. The price at which the EFSF would pay for the debt is controversial, but most see it paying the current market price for the bonds, which is below face value. The EFSF would then forgive the difference in the value of those bonds, essentially giving the peripheral nations a haircut on their debt, allowing them time to get back on their feet.
All this sounds good in theory, but it may not work in practice. Investors may be reluctant to give up their bonds at distressed market prices. Meanwhile, there is no guarantee that the new eurobonds would attract enough investors to fund the buybacks. Investors would be more willing to fund this new debt transfer from the periphery to the core if they knew with certainty that fiscal discipline was the new norm in Europe. For that to happen, Europe will need to get closer than ever.