The document discusses the challenges of managing and reducing public debt in the Eurozone, focusing on the necessity to ensure the sustainability and stability of the common currency. It identifies three main strategies to address high public debt:
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Mutual Support Mechanism: In case of economic difficulties, Eurozone states could collectively support a struggling country while it carries out necessary fiscal efforts to stabilize its financial situation. This solidarity mechanism would strengthen collective commitment to public finance recovery and credibility of the debt reduction trajectory.
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Land Ownership Redistribution: Countries with high debt could consider redistributing ownership of residential properties to a limited extent, becoming creditors of annual payments equivalent to land rental fees. Property owners could defer these payments until property sale or transfer, providing a steady income for the state.
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Central Bank Support: The European Central Bank could buy a portion of the debt from highly indebted European states and hold these perpetual, non-interest-bearing securities on its balance sheet.
These strategies aim to tackle the issue of high public debt by introducing innovative approaches that involve mutual support, property redistribution, and central bank intervention. While these ideas carry significant political and legal complexities, they offer alternatives to traditional austerity measures and may help prevent economic shocks by stabilizing the Eurozone's financial health. The document suggests that such strategies should be debated carefully to avoid hasty decisions when facing large-scale economic crises in the Eurozone.
