Q&A: Bonds, project bonds and eurobonds

image captionGovernments auction bonds to raise funds

The idea of eurozone economies clubbing together to issue bonds representing all 17 member nations has been gathering momentum.

And it has some pretty influential backers, including new French President Francois Hollande, Italian Prime Minister Mario Monti, and the President of the European Commission, Jose Manuel Barroso.

But those that really matter are less keen.

The German government has said eurobonds "don't make sense" right now, given that individual member states conduct their own economic policies. It is also concerned the introduction of such bonds could reduce the resolve of highly-indebted governments to balance their budgets.

There does, however, appear to be a compromise in the works. The Germans seem open to the idea of "project bonds" that can be used to finance infrastructure investment across Europe.

But what are eurobonds and project bonds (neither of which actually exists yet), and what are the government bonds on which they are based?