A. Merging existing supranational debt (Commission, ESM, EIB) may appear straightforward.  The impact in terms of size would be limited – on aggregate it would amount to around € 1.2 trillion – but the signalling effect would be powerful. It would nevertheless require addressing some legal complexities, as these are institutions with different legal foundations. To circumvent the latter, an option may be to purchase or to pool these securities and issue a common Eurobond in exchange, with a common debt agent. And this brings us to the next set of options: transforming existing debt.
 
B. We could transform part of sovereign debt into supranational debt (or, even better, into genuine European sovereign debt) through financial engineering. xxiii Various solutions have been proposed since the euro area crisis and, in some cases, have even been put in draft legal texts. These essentially involve pooling or withdrawing a large share of sovereign bonds, issuing Eurobonds in exchange, and introducing seniority structures to ringfence a “safe” tranche against default riskxxiv . This “partial transformation” would help to create more European safe assets without adding to the EU’s fiscal burden: up to €6 trillion in supranational bonds in the Euro area, xxv together with the remaining AA-rated sovereign bonds.

The “blue/red bonds” option, proposed in 2010 by Delpla and von Weizsäcker and more recently by Blanchard and Ubide xxvi  consists in replacing part of sovereign debt by supranational “blue bonds” issued by the EU (up to 25% of the aggregate GDP), backed by Member States’ tax revenues, and ranked legally senior to national “red bonds.”. Appealing as it looks, it raises some issues, for instance about the coordination between national and supranational debt issuers during the “transition” period, or the liquidity of remaining “red bonds” as the market share of “blue bonds” gradually increases. 
A second financial engineering option, the so-called “ESBies”, has been proposed among others by Brunnermeier.​​​​​​​xxvii It consists in a securitisation arrangement that would, in principle, be easier to implement than capital-based structures like a European Debt Agency. xxviii Rebranded as sovereign bond-backed securities (SBBS), a proposal was put forward by the Commission in 2018. While this initiative was met at the time with limited support, it is worth revisiting it with fresh eyes. 

C. Last but not least, a feasible step to strengthen the supply of European safe assets is to build on and enhance existing EU frameworks, such as SURE and NGEU. xxix- The launch of the NGEU programme in 2021 marked a milestone in European debt markets. The Commission’s recent measures (a unified funding approach, the launch of repo facilities)xxx  are fostering a more complete and integrated EU-bond market. Investors’ appetite has been strong, with EU-bonds quickly gaining recognition as a credible benchmark asset for international investors. A (limited) possible start would be to roll over the existing NGEU debt, rather than reimbursing it from 2028.

The main advantage of leveraging the success of NGEU lies in its comparative technical simplicity. We are talking about plain vanilla bonds, that are widely accepted by markets. Politically, it remains more challenging: some may consider that aiming for a common debt is not timely when some large Member States face strained public finances. As said, this should not be seen as a license for some countries to free-ride. Rather, joint debt should be issued to fund only investments that raise potential growth and finance European public goods. We could consider, for example, some EU-bonds issuance earmarked for financing the new needs in defence infrastructures and their industrial integration  xxxi replicating the NGEU model. 
 
Let me sum up and look ahead. All the options I have just highlighted are worth our renewed attention.  May I, here in Luxembourg, revisit the spirit that guided Pierre Werner in 1970, and later Jacques Delors, who drew inspiration from it in his 1989 report, and take three lessons from them?

1.    First, to set a clear long-term ambition: for them, it was a single currency; for us today, it is the creation of a euro-denominated safe asset.

2.    Second, to accept pragmatic steps along the way: I propose that we begin by exploring various avenues for developing euro safe assets, each of which would significantly increase the volume available. If several coexist for a time, they may later converge. But if none exist within three years — the duration of the first phase of the Werner Plan — the consequences would be far more serious.

3.    Third, to stay the course regardless of international monetary turbulence — and precisely because of it. We all know that the Werner Plan had to contend with the collapse of the Bretton Woods system in 1971… yet it remained, albeit with extended timelines, the inspiration behind the EMS and later the EMU.

Today, we do not face at this stage the same kind of international monetary crisis, but we no longer have more flexibility with timelines. This must be Europe’s moment — and the euro’s moment. It is now or never: emerging currencies will not wait for us.

Let’s come back to the first Eurobonds issued here in 1963. The truth is that these bonds were denominated in dollars at the time. Our challenge today is to develop true Eurobonds, i.e. bonds issued in euros at the European level and that are seen as sovereign bonds.
 
Financing tools carry with them more than financial capacity. They materialize a vision. Today, we are once again called upon to show our spirit of ambition. Our Union now faces even greater challenges, which demand collective solutions — from defence and security to the green and digital transitions. And our Union must complement its monetary sovereignty with economic and financial sovereignty.
 
By completing this unfinished work, we would not only honour the pioneering spirit of Robert Schuman and the founding fathers, but even more serve well our fellow European citizens by building confidence in our shared future. 
 

 

i Posen (A.S.) (2025), “The New Economic Geography”, Foreign Affairs, 19 August
ii Landau, (J. P.), « Un monde financier sans actifs sûrs », Les Échos, 20 August
iii Kindleberger (C.) (1973), The World in Depression, 1929-1939. Berkeley: University of California Press
iv Rey (H.) (2025), « Une fenêtre d’opportunité pour l’euro », Le Monde, 11 May
v Lagarde (C.) (2025), Earning influence: lessons from the history of international currencies, speech, 26 May
vi Escrivá (J.L.) (2025), The future of payments and the international role of the euro, speech, 18 September
vii Villeroy de Galhau (F.) (2025), A mobilising deadline for seizing “Europe’s moment”, speech, 14 May
viii Letta (E.) (2024), Much more than a market, April. Draghi (M.) (2024), The future of European competitiveness, September
ix Villeroy de Galhau (F.) (2025), A mobilising deadline for seizing “Europe’s moment”, speech, 14 May
x Villeroy de Galhau (F.) (2025),  Letter to the President of the Republic, 10 April
xi GDP PPP in current euro in 2024, source: AMECO/European Commission, October 2024.
xii Villeroy de Galhau, (F.) (2025), The Savings and Investments Union: (Finally) turning an idea into actions, speech, 11 September
xiii As of August 2025, dollar stablecoins represented 99% of the market, with two issuers (Tether and Circle) accounting for 90% of the total. Source: Sentora Research
xiv Excluding U.S exports and intra-euro area trade. See Figure 4 in Boz (E.) et al., (2025), “Patterns of Invoicing Currency in Global Trade in a Fragmenting World Economy”, IMF Working Paper No. 2025/178
xv Amiti (M.), Itskhoki (O.), Konings (J.) (2020), “Dominant Currencies: How Firms Choose Currency Invoicing And Why It Matters”, NBER Working Paper n°27926
xvi Boz (E.) et al. (2022), “Patterns of invoicing currency in global trade: New evidence”, Journal of International Economics, Vol. 136
xvii Schnabel (I.), Panetta (F.) (2020), The provision of euro liquidity through the ECB’s swap and repo operations, Blog, 19 August
xviii ECB (2025), Eurosystem expands initiative to settle DLT-based transactions in central bank money, 20 February
xix ECB (2024), Eurosystem launches initiatives to improve cross-border payments by interlinking fast payment systems, 21 October
xx Lagarde (C.) (2025), Earning influence: lessons from the history of international currencies, speech, 26 May
xxi Nagel (J.) (2025), “Building blocks for a strong and sovereign Europe”, speech, 22 September
xxii Lane (P.) (2025), “The euro area bond market”, speech, Dublin, 11 June; Gossé (J.-B.), Mourjane (A.) (2021), “A European safe asset: new perspectives”, Bulletin n°234, article 6, Banque de France, April
xxiii Lane (P.) (2025), “The euro area bond market”, speech, Dublin, 11 June
xxiv For a comprehensive comparative analysis of some of the options discussed in this speech, see Leandro (A.), Zettelmeyer (J.) (2019), “Creating a Euro Area Safe Asset without Mutualizing Risk (Much)”, Working Paper, PIIE
xxv For the maximum amount of safe assets we take the baseline scenario for ESBies (Brunnermeier et al (2016) : EA GDP ~ 14.5 Tn €, Total securitized debt = 60% of EA GDP, of which 70% would be the senior tranche [ 14.5*0.6*0.7 = €6.1 Tn]. In turn, following the proposal blue/red by Blanchard and Ubide (2025), up to 25% of EA GDP would be “blue”, i.e. €3.6 Tn (a share large enough to get a liquid market but still leaving an important portion of “red” bonds as a buffer to make blue bonds safe).
xxvi Delpla (J.), von Weizsäcker (J.) (2010), “The Blue Bond Proposal”, Bruegel Policy Brief, 6 May; Blanchard (O.), Ubide (A.) (2025), “Now is the time for Eurobonds: A specific proposal”, PIIE, 30 May
xxvii Brunnermeier (M.) et al. (2016), “ESBies : safety in the tranches”, Working Paper Series No 21, ESRB; Brunnermeier (M.) et al. (2017), “ESBies : safety in the tranches”, Economic Policy, Vol. 32, Issue 90, April
xxviii Leandro (A.), Zettelmeyer (J.) (2019), “The Search for a Euro Area Safe Asset”, Working Paper, PIIE; Giavazzi (F.) et al. (2021), “Revising the European Fiscal Framework”, 23 December; Amato (M.) et al. (2023), “European Sovereign Debt Risk Management: the Role of a European Debt Agency”, Working Paper
xxix Lenarčič (A.), Sušec (M.) (2020), “Pandemic crisis as a catalyst for a common European safe asset”, Blog, ESM, 20 October
xxx European Commission (2025), “How EU issuance works”, website ; Born (A.) et al. (2024), “Do EU SURE and NGEU bonds contribute to financial integration?”, Financial Integration and Structure in the Euro Area 2024
xxxi Villeroy de Galhau, (F.) (2025), “Europe has the means to respond strategically to the currency revolution”, Le Grand Continent, 25 September