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Plan for joint eurozone bonds on cards
Source: Agencies |
September 15, 2011, Thursday
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THE European Commission will soon present options on how the eurozone might issue bonds jointly, its president Jose Manuel Barroso said yesterday, but warned there was no simple solution to a debt crisis that threatens Europe's economic and political future.
Speaking to the European Parliament, he said Europe faced its most serious challenge in a generation.
"This is a fight for the jobs and prosperity of families in all our member states. This is a fight for the economic and political future of Europe. This is a fight for what Europe represents in the world," Barroso said.
Germany remains adamantly opposed to debt that would be jointly issued and underwritten by all 17 members of the currency bloc.
A ruling by Germany's top court last week has made it impossible for Berlin to sign up to joint euro bonds even if it wanted to, experts say.
Barroso warned such bonds offered no magic bullet to end the crisis and Olli Rehn, the European Union commissioner for economic and monetary affairs, said they could only be introduced if accompanied by much tighter fiscal oversight.
"To my mind it is clear that euro bonds, in whatever form they were to be introduced, would have to be accompanied with a substantially reinforced fiscal surveillance and economic policy coordination as an essential counterpart so as to avoid moral hazard and ensure sustainable public finances," said Rehn.
"Of course this would have implications for fiscal sovereignty of member states, which calls for a substantive debate in the (respective) euro area member state, to see if they would be ready to accept this."
Answering those who have called for Greece, whose excessive borrowing sparked the debt crisis, to default and restructure its debts or to leave the eurozone, Rehn said such a move would have harsh consequences.
Barroso said the only way for the EU and eurozone to work closely together to stop the negative cycle in financial markets was to deliver deeper integration.
Speaking to the European Parliament, he said Europe faced its most serious challenge in a generation.
"This is a fight for the jobs and prosperity of families in all our member states. This is a fight for the economic and political future of Europe. This is a fight for what Europe represents in the world," Barroso said.
Germany remains adamantly opposed to debt that would be jointly issued and underwritten by all 17 members of the currency bloc.
A ruling by Germany's top court last week has made it impossible for Berlin to sign up to joint euro bonds even if it wanted to, experts say.
Barroso warned such bonds offered no magic bullet to end the crisis and Olli Rehn, the European Union commissioner for economic and monetary affairs, said they could only be introduced if accompanied by much tighter fiscal oversight.
"To my mind it is clear that euro bonds, in whatever form they were to be introduced, would have to be accompanied with a substantially reinforced fiscal surveillance and economic policy coordination as an essential counterpart so as to avoid moral hazard and ensure sustainable public finances," said Rehn.
"Of course this would have implications for fiscal sovereignty of member states, which calls for a substantive debate in the (respective) euro area member state, to see if they would be ready to accept this."
Answering those who have called for Greece, whose excessive borrowing sparked the debt crisis, to default and restructure its debts or to leave the eurozone, Rehn said such a move would have harsh consequences.
Barroso said the only way for the EU and eurozone to work closely together to stop the negative cycle in financial markets was to deliver deeper integration.
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