SEI: A Synthetic Euro Index for Eurozone Sovereign Debt Stabilization

We propose the Synthetic Euro Index (SEI), a rule-based financial instrument representing a dynamic basket of all Eurozone sovereign bonds. SEI operates as an additional demand layer, it does not replace national debt issuance, requires no tranching, and involves no joint liability.
Portfolio weights are determined by an algorithmic function primarily driven by GDP shares, creating a virtuous feedback loop: lower rates stimulate growth, which increases the country's weight, generating further demand.
The instrument is designed as a zero-coupon token with ECB-exclusive minting authority, supporting both direct (self-custody) and intermediated (bank) access.
We formalize the composition function, derive equilibrium spread compression, and present a historical simulation (2010–2024) showing significant stabilization effects during crisis episodes.