It’s not just that the market isn’t deep enough. The current incarnation of EU bonds are not secured the same way typical sovereign bonds are. And they sort of can’t be without the member states ceding more sovereignty.
We’ll see if the EU member countries can approve a framework for bonds that are closer to a treasury in its guarantees, I’m skeptical but it could happen, but they don’t exist right now.
As they say: under enough pressure everything becomes a liquid. The current situation is in many ways unprecedented and I think that Trump may well be the antagonist that forces the EU to band together more effectively.
We’ll see if the EU member countries can approve a framework for bonds that are closer to a treasury in its guarantees, I’m skeptical but it could happen, but they don’t exist right now.