German bond sale’s fate signals trouble ahead

[Bono]

Just print the money.

It's hard to see the ECB agree to print Euros for Bunds given that the Mediterranean countries still haven't kicked the habit of printing money in their pre-Euro days.

Well, the more money you print, the less depression you get.  Its up to the ECB.

Deficit monetarization is prohibited by the Euro treaties.
The ECB should print money, but they most certainly should not use it to buy long term debt.

[Bono]

The ECB should print money, but they most certainly should not use it to buy long term debt.

Why not?

Because it has distortionary effects. The central bank should limit itself to the nominal side of the economy. Having it buy long-term debt would bring it into the real side, and give the privileged whom the central bank would buy debt from into an unwarranted advantage. It would also create all sorts of incentives for rent-seeking. Besides, there is no need to as the current monetary policy tools are more than enough to do the job.