Debt crisis: OECD backs call for eurobonds The Paris-based, international think tank has waded into the political row over how to shore up the currency union with an emphatic endorsement of French President Francois Hollande's policy proposals. Measures to restore growth are vital to lift the ailing region alongside a "fiscal compact" to reduce debt and deficits, OECD chief economist Pier Carlo Padoan said. "Elections in a number of euro area countries have signalled that reform fatigue is increasing and tolerance for fiscal adjustment may be reaching a limit," he said. To ease the burden of austerity, "additional measures towards the establishment of a 'growth compact"" are needed. Among the OECD's proposals were issuing "jointly guaranteed government bonds to help recapitalise banks and enhance credit availability, [and] increasing jointly guaranteed resources available for the European Investment Bank to fund infrastructure projects." It added that "such moves could pave the way to a broader issuance of eurobonds." The proposals could have been taken out of President Hollande" election manifesto and will further isolate German Chancellor Angela Merkel as the OECD is internationally respected. Mr Padoan stressed that every effort has to be made to keep Greece in the eurozone, even if it meant eurozone taxpayers taking a hit on their bail-out funds. "There will be costs," he said. The point is that the counterfactual would be far, far worse. That would be the beginning of a much worse picture. The cost of Greece not exiting would definitely be smaller. Letting Greece leave would result in "huge" costs and potentially trigger a series of other exits that could devastate the global economy, he warned. It would have two effects. It would trigger a recession in the euro area and, given the links through the banks, hat could expand to the global economy. Another element would be political contagion. It could trigger a number of exit options in terms of the political debate. If others left, that would be more damaging to the global economy than just Greece leaving.