A day after German leader Angela Merkel called for more eurozone fiscal integration, and in a week the bloc's national leaders will meet in Brussels to discuss saving the bloc, the chancellor's countrymen remain divided over the key issue of eurobonds.
A day after German leader Angela Merkel called for more eurozone fiscal integration, and in a week the bloc’s national leaders will meet in Brussels to discuss saving the bloc, the chancellor’s countrymen remain divided over the key issue of eurobonds.
Some people view issuing them as a solution to the eurozone crisis.
Merkel (pictured) has not supported the loans, backed jointly by member states.
She voiced her opposition to them on Friday, partly because the currency bloc still has too many important economic and spending policies decided at national level.
As she and her French counterpart Nicolas Sarkozy both signalled agreement for greater integration, clearing a high hurdle to the bonds, some important German politicians remained uneasy about Eurobonds.
FDP leader Philipp Rösler told the Frankfurter Allgemeine Sonntagszeitung “Eurobonds will not happen with this government in power.”
Instead, he advocated an expanded EFSF rescue fund.
If the euro can be saved, Rösler said, it could become “the most stable currency in the world – more stable than the American or Chinese currencies.”
But the EFSF bailout fund, not Eurobonds, is the key to saving it, he said.
“Now it is about representing to investors, aggressively, the unquestionable advantages of the EFSF.”
But Germany’s EU tsar Günther Oettinger said his countrymen wrong to reject Eurobonds.
He told Die Welt newspaper: “One cannot categorically rule out Eurobonds, it could be that they become necessary.”
He said they could form a “cornerstone next to consolidation measures and next to changes to the EU Lisbon treaty.”
Meanwhile, south of Germany Austria’s chancellor Werner Faymann said on Friday Eurobonds could be “a third or fourth step, but the next thing must be, with treaty changes, to create a functioning basis.”
Both he and Merkel call for sanctions on eurozone members who break commonly agreed rules on indebtedness.
But he said the ECB should not follow the example of America’s Fed in wholesale buying of sovereign debt, and “not to turn itself into a European Federal Reserve”.