• Germany's news in English
 

Germany fights growing support for eurobonds

The Local · 15 Aug 2011, 12:43

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
Palestinian TV teen given German residency
Photo: Norddeutsche Rundfunk/Screenshot

Palestinian TV teen given German residency

6 hours ago

A Palestinian teen threatened with deportation who burst into tears during a televised debate with German Chancellor Angela Merkel has got a residency permit for "humanitarian reasons," a statement said Friday.

The photojournalist making news intimate
World Press Photo winner Mads Nissen. Photo: DPA

The photojournalist making news intimate

1 day ago

Photographer Mads Nissen’s World Press Photo of the Year is currently touring Germany and the world. It’s a provocative image of two Russian gay men and one that some say is changing the definition of photojournalism.

Six athletics world champs head to Berlin
ISTAF is held annually in Berlin. File Photo: DPA

Six athletics world champs head to Berlin

1 day ago

six world champions, freshly crowned from Beijing, will be gracing Berlin's Olympic Stadium on Sunday in the annual ISTAF track-and-field meet.

A week after heatwave, snow falls in Bavaria
Zugspitze, Germany's highest mountain. File Photo: DPA

A week after heatwave, snow falls in Bavaria

1 day ago

From 30C to snow in under a week? It's possible in Germany where seven centimetres of the white stuff fell at the top of the Bavarian Alps on Friday.

Oktoberfest and the Refugee Crisis
Munich plans to keep revellers, refugees apart
Police and refugees at Munich Central Station. Photo: DPA

Munich plans to keep revellers, refugees apart

1 day ago

Police in Munich are preparing a significant operation to ensure that drunken revelers at Oktoberfest are kept away from refugees arriving at the city's central station from Budapest.

Criminal had time for pit stop in 20-cop-car chase
Photo: DPA

Criminal had time for pit stop in 20-cop-car chase

1 day ago

With 21 police cars and a helicopter hot on his heels, it seemed unlikely that police in Düsseldorf would fail to catch one rogue motorist. But after a two-hour pursuit, that's exactly what happened in the early hours of Friday.

What's keeping Germans awake at night in 2015?
The Greek debt crisis has been haunting German dreams. Source: Wikipedia

What's keeping Germans awake at night in 2015?

2 days ago

Having to cough up for the excesses of spendthrift southern Europeans is the fear most likely to haunt German nightmares in 2015. But getting caught up in a natural disaster isn't far behind, an annual survey shows.

This Week in History
The death of a great humanitarian
Schweitzer spent most of his later years at Lambaréné. Photo: DPA

The death of a great humanitarian

2 days ago

On September 4th 1965, the world lost one of its most dedicated and tireless humanitarians, as Albert Schweitzer died in the African hospital he had created and cherished for over 50 years. A hospital that continues to save lives today.

Refugee crisis
Pro-refugee group push punk classic to no. 1
Die Ärzte singer and drummer Bela B. with a DVD titled "not interested in Nazis" in 2009. Photo: DPA

Pro-refugee group push punk classic to no. 1

1 day ago

Under the banner of "Arsehole Action", activists campaigning against xenophobia and hatred of refugees have pushed a 1993 hit by punk band Die Ärzte mocking the far right to the top of Germany's charts.

Refugee Crisis
Orban: Muslims threaten European identity
Viktor Orban, guardian of Europe? Photo: DPA

Orban: Muslims threaten European identity

1 day ago

Hungarian Prime Minister Viktor Orban warned Thursday that the wave of mostly Muslim refugees coming to Europe threatens to undermine the continent's Christian roots - an idea rejected by German Chancellor Angela Merkel.

RECEIVE OUR NEWSLETTER AND ALERTS

Features
'Berlin is kind of like the best American city'
Features
How Brits in Germany are facing Brexit fears
Sport
German named 'arse bombing' world champ
Travel
Retiree finds parked car after three-week search
National
Ten ways Germany puts Britain to shame
Business & Money
German gadget clamps down on Nutella thieves
Society
Is Germany now a nation of couch potatoes?
National
Half of Germans 'have had sex in their car'
Society
Deadly stew spooks home vegetable gardeners
Politics
The man who brought two Germanies together
Features
Where to get your culture fix in Cologne
Education
Fairytale world of Brothers Grimm brought to life
Rhineland
Thieves leave 1,000 open beers untasted
National
Way to some Germans' hearts is through their wallets
National
Germany's biggest challenge: European refugee crisis
Travel
Where to get your adrenaline pumping in Germany
Technology
Could thieves hack into luxury cars?
What to watch out for when snapping your lunch
National
German lefties through history
National
The fight over prostitution heats up
National
Merkel: migrants, not Greece, are the real challenge
Features
How I explained the Queen to the Germans
Education
Why Germany does 'back-to-school' traditions better
National
Germans are ‘not how foreigners think’
National
A mum and daughter reunite 70 years after WWII
Sport
Bra stops bullet in hunting mishap miracle
National
Cows trample German woman to death in Graubünden Alps
Business & Money
Start-up helps new Berliners short cut bureaucracy
National
The 1,000s of Germans massacred after the Second World War
Sport
Germany star scores own goal with PR gaffe
Features
'Women-only' parking: sensible or sexist?
Politics
Satire and reality blur in parody party's strife
National
13-year-old boy detained for trying to join Isis
Culture
Berlin restaurant serves up Greek Crisis Menu
Rhineland
Doctor on trial after woman wakes in morgue
Society
Six odd things Germans do in the summer
Society
Police bust kinky Bavarian couple over painful love-making
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

6,913
jobs available
Toytown Germany
Germany's English-speaking crowd