interesting and straightforward, but credit risk seems inadequately addressed to me. 1/

sure, senior to national debt, but if any EU country for whatever reason fails to fund its part of a coupon, what happens? if there is not some kind of mutual guarantee, the least creditworthy member can trigger partial default, and that would have to be priced in spreads. 2/

if member-states more broadly are constrained, is there a mechanism to convert credit risk (risk of nonpayment) into valuation risk (risk the Euros repaid will be less valuable). experience suggests investors can manage the latter more readily than the “gap risk” implicit in the former. /fin