EFSF as a Bank--Munchau Plan

Wolfgang Muncho proposes a plan to save the eurozone by addressing the issue of sovereign debt held by global banks. He suggests transforming the EFSF into a bank to act as a dealer of last resort, buying sovereign debt to stabilize prices. The ECB would provide liquidity support as needed. In the long run, the plan involves replacing sovereign debt with Eurobonds to ensure more stable funding through capital markets.

What is the anticipated long-term solution for funding illiquid sovereign debt according to Muncho?

What is the exit strategy proposed by Muncho regarding the use of Eurobonds?