The Eurozone Still Faces Several Challenges

June 25, 2012 by

European financial officials are preparing their policy package to deal with the current crisis for the meeting scheduled next week. It is not clear whether any of the proposals will be able to stop the ongoing bank run. Here are some of the rumored proposals: Euro members jointly issue short term bills – in effect, short term euro bonds, a debt redemption fund as proposed by economic advisors to Merkel, new procedures for euro area banking supervision and using the ESM to purchase peripheral nations’ bonds in order to reduce their sovereign interest rates.