To continue getting breaking news and the full stories from The Boston Globe, subscribe today.

The Boston Globe

Business

Euro bond idea has fans, critics

EU leaders agree that concept is worthy of study

FRANKFURT — To eurozone countries in need, euro bonds would be a noble expression of European solidarity and a crucial instrument for preserving the common currency.

To Germans and quite a few others, though, euro bonds would be a lot like co-signing a loan for a deadbeat brother-in-law.

Those caricatures have dominated a debate that has left Europeans deeply divided on a central question: Should eurozone countries create common bonds to reduce borrowing costs for members that cannot get affordable credit on their own?

But despite the intensity of the debate, even as political upheaval in Greece and bad bank loans in Spain mushroom into existential threats to the currency union, the euro bond remains only the vaguest of concepts.

About the only thing clear is that Germany and some other creditworthy northern countries oppose adopting such bonds anytime soon.

Meanwhile, Francois Hollande, the new French president, seems keen on speeding things up — even if he has not quite articulated how his idea would work.

‘‘You don’t know what Francois Hollande is talking about when he talks about euro bonds,’’ said Jacques Delpla, a member of the French Council of Economic Analysis, a panel that advises the government. ‘‘An open bar with German money for Greece and Spain? That doesn’t work.’’

At their meeting in Brussels last week, European Union leaders agreed only that euro bonds deserved further study.

Delpla is the co-author, along with a German economist, Jakob von Weizsacker, of one of the few detailed proposals so far. They outlined how euro bonds might be used to ease financial pressure on countries like Greece, Spain, or Italy while addressing German concerns by encouraging more prudent government spending.

The basic idea of euro bonds does enjoy wide support among economists. Proponents also include Christine Lagarde, managing director of the International Monetary Fund. And last week the Organization for Economic Cooperation and Development in Paris called for some variation of euro bonds.

The various models share a basic idea: In addition to each country’s raising money by issuing its own bonds, as is now the practice, they would put at least some of the debt into a common pool. These pooled bonds would be issued by some kind of joint European debt agency, with all members assuming shared responsibility for repayment.

There is no agreement yet on whether that pool would be used to replace existing debt or to finance new borrowing. Nor is it clear how countries would have access to the money raised by the sale of the bonds.

Surprising as it may seem, the eurozone’s total government debt actually is lower as a proportion of annual gross domestic product — 87 percent — than that of the US government, which is more than 100 percent of GDP.

A reason eurozone debt has reached crisis proportions is that a few countries in Southern Europe owe too much money and have lost the faith of investors.

The United States so far is able to stay a half-step ahead of its debt because it can keep selling Treasury bonds. Investors worldwide are so certain of being repaid that they accept interest rates of less than 1.75 percent for a 10-year Treasury bond.

Right now, though, the weakest eurozone members have no such credibility with creditors. So Spain must pay more than 6 percent on its 10-year bonds, while investors last week were demanding 5.6 percent for Italian bonds. And about the only ones willing to lend to Greece these days are Europe’s bailout institutions and a few roll-the-dice hedge funds.