The euro financial “ecosystem” is constrained by the scarcity of euro-denominated liquid short-term safe instruments to serve as “near money” and high-quality collateral available to all.
It is shown how the ECB could easily eliminate this scarcity by issuing a large volume of its own debt certificates, and thereby strengthen monetary transmission and stability. Establishing a market for such “E-bills” would pave the way for the introduction of European bonds, but be technically and politically much easier. Issuing E-bills would be a dramatic but readily feasible step towards European financial integration.