ECB's Coene says euro zone exit possible in theory: paper

(Reuters) - A country could in theory leave the euro zone if it wanted to, European Central Bank policymaker Luc Coene said, but he added that he could not imagine which nation would want to do so.

Merkel Rejects Joint Euro Debt, Promises to Stay Hard Course

German Chancellor Angela Merkel told supporters she’ll stand as a bulwark against joint debt in the euro area if she’s re-elected in four days and continue to extract conditions from indebted nations.

Sweden Is Safest as Crisis Upends Bond Market

Sweden is enjoying its lowest borrowing cost ever relative to Germany as investors reward the biggest Scandinavian economy for cutting its debt to less than half Europe’s average and enforcing discipline at its banks.

Euro bonds are not the answer

Euro bonds are not the answer to the region’s raging financial crisis. The euro countries aren’t going to agree to guarantee each others’ debts in time to solve it. And, once it is over, neither euro bonds nor fiscal union is desirable. Market discipline is a better way of dealing with the current crisis as well as running monetary union in the long run.

One can understand why fiscally-challenged governments such as Italy’s and Greece’s are in favor of euro bonds. If they could issue debt which was guaranteed by all their partners in the euro zone, they wouldn’t find it so hard to borrow money. They would then no longer be under such pressure to do unpopular things like tighten their belts and reform their economies. One can also understand why investors are clamoring for the introduction of euro bonds. They would recoup the losses on their investments in fiscally-weak countries’ bonds.