In addition to the benefits of such a fund, the proposal also recognizes the problem of the phony interbank payment systems represented by Target2 and provides an exit.
As the authors recognize, the objections to this market and investment oriented proposal will be political, directed at Germany and suggesting that it is, once again, taking a ham-fisted approach to the deserving but profligate EU periphery.
The authors address this by saying,
"...under the current circumstances one has to choose the lesser evil: a strong euro combined with ever-increasing tensions which threaten global financial stability, or a weaker euro without the internal tensions. We believe that the global economy will be better off under the second scenario."I would add one thing. A 'stronger' euro under the ECB proposals is an artificial and illusory construct that would eventually be hollowed out by economics and by the markets.