• Germany's news in English
 

Germany fights growing support for eurobonds

Published: 15 Aug 2011 10:47 GMT+02:00
Updated: 15 Aug 2011 12:43 GMT+02:00

The idea of eurobonds issued and guaranteed by countries with better credit ratings has long been floated as a way of helping debt-saddled Greece and other struggling eurozone members.

Germany is opposed to the introduction of eurobonds as it believes they would increase its own borrowing costs and hold back ailing countries from implementing much-needed reforms.

While Chancellor Angela Merkel is due to meet French President Nicolas Sarkozy on Tuesday, Merkel's spokesman Steffen Seibert told a regular news conference on Monday that the two leaders would not discuss eurobonds.

"The German government does not consider it worthwhile talking about eurobonds at the present time," he said, adding that Germany does not believe this is "the right way" to go to help solve the eurozone crisis.

Joint eurozone bonds were not the right solution for the foreseeable future, said Peter Almaier, parliamentary lead of Merkel’s Christian Democratic Union parliamentary party on Monday.

He said such measures would remove the pressure on indebted states to get savings programmes in place.

Finance Minister Wolfgang Schäuble had spoken out firmly against them over the weekend

“There is no change: There will be no communitisation of debts, and no unlimited assistance,” he told Der Spiegel magazine.

“I rule out eurobonds so long as the member states run their own finance policies and we need the different interest rates so that there are incentives and potential sanctions in order to create financial policy solidarity.”

He said he was optimistic that the euro would survive the crisis, but that those currency partners which were struggling would not be rescued at any price.

This was supported by Economics Minister Philipp Rösler of the Free Democratic Party who told the Handelsblatt on Monday that eurobonds would mean higher interest rates and thus increase the burden on taxpayers.

But the Welt am Sonntag newspaper reported that the idea was no longer being completely ruled out within government circles.

Citing unnamed sources, the paper said that eurobonds and a more strongly centralised finance and economic policy were being considered as a last-ditch tactic, in the event that the current crisis threatened to lead to the break-up of the currency union.

And an increasing number of heavyweight European figures are calling for eurobonds to be introduced

Leader of the eurozone finance ministers Jean-Claude Juncker and Currency Commissioner Olli Rehn have spoken out in favour of the idea of eurobonds, while Italian Finance Minister Giulio Tremonti said on Saturday, “We would not be where we are now if we had had eurobonds,” according to the Süddeutsche Zeitung on Sunday.

Germany’s main opposition parties have also suggested eurobonds be introduced with Social Democratic Party leader Sigmar Gabriel it should be a matter of urgency.

“We urgently need a communal guarantee of bonds – that is the translation of eurobonds – at least for part of the debt which is possible for every European member state according to the Maastricht treaty, for 50 to 60 percent” he told ARD public television.

He said the fact that the Central European Bank was buying bonds, was an emergency measure because the European heads of state had not been able to impose their authority to be able to buy them up themselves.

But he said there should be a difference in interest paid by different countries such as Germany or Greece. States which want to issue the eurobonds would have to give up part of their budgetary sovereignty in order to do so, he added.

His suggestion was backed by the Green party whose leader Cem Özdemir told the Rheinische Post paper Eurobonds would certainly be cheaper than gigantic rescue funds. He suggested that the increase in interest rates on bonds could be countered if, “eurobonds were only allowed to cover up to 60 percent of gross domestic product.”

Merkel and Sarkozy meet on Tuesday in Paris to discuss the eurozone crisis.

The Local/DPA/AFP/hc

The Local (news@thelocal.de)

Your comments about this article

12:11 August 15, 2011 by Havel
Eurobonds are the worst thing for Europe!

Say no to Eurobonds.

Call your local government office and let them know.
17:21 August 15, 2011 by johnny108
Eurobonds are the rest of the Eurozone's way of making Germany pay for their financial mistakes!!

GERMANY is the ONLY country who is recovering from the bad economy- LISTEN TO THEM!!!

Or, be quiet, and suffer in your debt- DO NOT expect Germany to rescue you!!
Today's headlines
Teachers to strike nationwide from Monday
Photo: DPA

Teachers to strike nationwide from Monday

Teachers all over the country are expected to stike starting Monday, German education trade union GEW said, after negotiations with the wage commission of the federal states (TdL) failed to achieve results. READ  

EU court deals blow to US Iraq objector's hopes
Andre Shepherd at the European Court of Justice in June 2014. Photo: DPA

EU court deals blow to US Iraq objector's hopes

American soldier Andre Shepherd, who applied for asylum in Germany as a conscientious objector against the war in Iraq after going AWOL from his unit, saw a judgement by the Court of Justice of the European Union (CJEU) go against him on Thursday. READ  

Intersex person sues clinic for unncessary op
Photo: DPA

Intersex person sues clinic for unncessary op

Intersex person Michaela Raab is suing doctors in a Nuremberg court, who she said operated on her genitals and put her through female hormone therapy without having told her she was genetically a man. READ  

Greece bailout
Greece bailout passes with massive majority
Wolfgang Schäuble addressing the Bundestag on Friday. Photo: DPA

Greece bailout passes with massive majority

UPDATE:German MPs voted 542-32 in favour of extending Greece's bailout programme on Friday. READ  

German soars into ski jump top spot
Photo: DPA

German soars into ski jump top spot

Germany is a "Weltmeister" again, this time in ski-jumping. Severin Freund's 134-metre vertical jumps, and new world distance record of nearly 136 metres, ended the nearly decade-and-a-half wait for German ski jump fans starved for gold. READ  

Muslim Council says Jewish fears 'justified'
Muslims at prayer in Frankfurt's Abubakr Mosque. Photo: DPA

Muslim Council says Jewish fears 'justified'

After the president of the Central Council of Jews warned against anti-Semitism in Muslim areas of German cities, his Muslim opposite number agreed that 'these fears are justified”. READ  

Consumer rights office slams Facebook
Photo: DPA

Consumer rights office slams Facebook

The Federation of Consumer Protection Offices (vzbv) has warned Facebook over legal breaches in its terms and conditions, saying that its claim on the homepage that “Facebook is free and always will be” is misleading. READ  

Spoof hails Varoufakis: puts 'hell' in 'Hellenica'
Yanis Varoufakis, Greece's "Minister of Awesome". Photo: DPA

Spoof hails Varoufakis: puts 'hell' in 'Hellenica'

An offering that rehabilitates the much-maligned German sense of humour is rocking the internet with a searing spoof metal tribute to Greece's formidable new finance minister Yanis Varoufakis, filled with painful moments of self-mockery. READ  

This Week in History
Kafka's Metamorphosis: 100 years of perplexity
Franz Kafka. Photo: DPA

Kafka's Metamorphosis: 100 years of perplexity

100 years ago, Franz Kafka published The Metamorphosis, now seen as one of the most significant works of 20th century German literature. The Local speaks to the academic who has reinterpreted it for a modern audience. READ  

Nurse jailed for life for serial patient murders
Niels H. in court. The five murder counts against the former nurse may just be the start. Photo: DPA

Nurse jailed for life for serial patient murders

A male nurse who injected patients with overdoses of heart medication for the thrill of resuscitating them was on Thursday sentenced to life imprisonment on five counts of murder. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Features
Kafka: puzzling translators 100 years on
Business & Money
France or Germany: Which country really is the best country to work in?
Photo: Police
Rhineland
Student driver crashes tank into family garden.
Photo: DPA
Politics
There was a notable absence at the Anti-Semitism Commission
Sponsored Article
Tourist or lifer: what sort of expat are you?
National
How Dresden bombing still divides Germany, 70 years on
Sponsored Article
Are you an American expat? How to face FATCA
Photo: DPA
Gallery
Take a cute break with this gallery of baby animals
International
What's keeping UK expats from voting?
Photo: DPA
National
Terror alert at a new high. Should you be worried?
Gallery
The best regional foods TTIP opponents want to protect
Photo: DPA
Features
All you ever needed to know about Pegida
Photo: Shutterstock
Culture
This cosplayer did not think his plan through
National
Europe in statistics - from Spain to Sweden
Gallery
Top 12 German idioms
Culture
10 top tips for partying in Germany
Photo: DPA
Technology
What does the Chancellor see as the future of the internet?
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,207
jobs available
Toytown Germany
Germany's English-speaking crowd