CEPR Policy Paper 3: EMU and Public Debt Management: One Money, One Debt?

This paper discusses changes in public debt management under Economic and Monetary Union (EMU) and its implications for monetary policy. With the advent of EMU, government securities have been redenominated in euros. The speculative demand and the demand for portfolio diversification related to exchange rate variation have disappeared. Common euro denomination has made liquidity and default-risk the distinguishing dimensions of government securities issued by EMU member states.