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A Russian painting showing Soviet peasants signing up to loan money to their government

The promises and risks of the EU’s single safe asset project

The launch of a Sovereign Bond-Backed Security (SBBS) is advocated by EU leaders as the best way to overcome the flaws inherent in the monetary union, which became notably obvious after the euro debt crisis of 2009. The SBBS is supposed to offer European investors new reliable stores of value, a credible alternative to national sovereign bonds and, as such, a miracle cure for chronic instability in European bond markets. The project, however, raises significant questions.

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