Euroland Municipal Bonds: New city states

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Euroland Municipal Bonds: New city states

The euro is expected to speed the growth of a US-style market in local-authority bonds. In euroland, nations now matter less: cities and regions are becoming economic and financial actors in their own right. Banks are fighting hard to woo them as clients. But would-be investors aren't happy with the poor liquidity. What does this fast-growing market need to succeed? Marcus Walker reports.

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Case Study: Aubagne

Case Study: Leipzig

Case Study: Florence

Case Study: Bologna

Case Study: Lazio


Mayor Mario Primicerio runs his city from an office block a cut above your average town hall. Visiting president Jacques Chirac of France called it "the most beautiful office in the world". It's the Palazzo Vecchio, the 700-year-old fortress at the heart of Florence, and it has seen many a ruling dynasty rise and fall. It was home to the Medicis and the Renaissance-era Florentine republic. It hosted imperial ambitions and dreams of independence.

Now it plays host to a modern version of these civic aspirations. Primicerio, like local governors from Barcelona to Bavaria, wants cities and regions to regain their place as vital nodes of European culture, society and economy. Nations have been ascendant for two centuries but their integration - especially through the euro - has given opportunities for much older players to make their mark again.

"In Europe," says Primicerio, "borders are more conventional than natural. Sometimes the economic relations between metropolitan areas, such as Florence and Barcelona or Lyon, are more important than those between nations.


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