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What is the role of the European Financial Stability Facility in solving the Euro dept crisis and do you see in the near future issuing Eurobonds? What would be the price for Greece in this scenario?

From a political standpoint, the European Financial Stability Facility along with the permanent mechanism, the European Stability Mechanism highlights the solidarity between EU member states. In economic terms, it ensures that Greece will not go under, at least as long as Greek policymakers comply with the decisions of the EU summits. However, for the stability mechanism to be able to support the bond markets of bigger economies (Spain, Italy, or even France) the European leaders decided to leverage the European Financial Stability Facility 4 to 5 times, for the mechanism to acquire a fire power of around €1,100 billion. Equally important is the decision to create Special Purpose Vehicles in order to attract (along with European and IMF funds) capital investment from various sovereign wealth funds (e.g. Norway, China and the Gulf oil-exporting states) and re-capitalize the capital-strapped European banks.

It is well known that the northern European surplus nations rebuff the idea of Eurobonds because such financial instruments remove any incentives for productivity enhancing reforms in the deficit-addict states of the South. Additionally, some nations in particular (i.e. Germany) are intimidated by the inflationary pressures provoked by irresponsible spending of the rest of the member states (fueled by the low borrowing costs that the Eurobonds would provide).

In order to finance its operation European Financial Stability Facility has already issued its own bonds. Therefore, one could argue that European Financial Stability Facility constitutes some sort of Eurobonds in stages. The fund management cannot issue bonds and finance a member state in distress, unless the council has provided the mandate.

Is there danger Greece to be bounded from the Euro zone and in what conditions?

The latest EU leaders decision rules out the event of Greek insolvency and hence the possibility of exit from the common currency in the short and medium term. However, in the long term it is up to the Greek society to decide its business model and how it fits to the Euro zone. In any case, however, an attempt to secede from the euro area is technically impossible and can end up economically (and politically) disastrous.