Dutch position is not only ideological: it's deaf. Mutualization *is* happening through ECB balance-sheet expansion and removal of capital key & issuer limits.
This poses problems to core countries, which would be reduced by a federal bond financing federal expenditure.
1/5

First: ECB balance-sheet expansion is unconditional: the states can emit & spend on whatever they want. Everyone instead accepts that federal bonds (f-bonds) would have conditions attached (for instance on expense areas, but not only). 2/5

Second: in the absence of a safe asset, the ECB cannot go back from the k-key/issuer limit removal without putting southern countries into harm, and endangering monetary transmission in doing so. Hence, without f-bonds, temporary ecb action *will* become permanent. 3/5

Third: in doing so, they DO CREATE perverse incentives, as southern countries become "addicted" to monetary financing and won't reform their economies (while f-bonds would by definition imply reform by centralizing some competences & spending). NO f-bonds *is* moral hazard. 4/5

In other words, NL opposition to f-bonds is ideologically-selfdefeating: it ultimately leads to unconditional, long-term, moral-hazard-inducing monetary financing, that is EXACTLY what they claim to abhor. 5/end

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