• 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
Foreign investors rate Germany Europe's best
A worker assembling motors at a Magdeburg factory. Photo: DPA

Foreign investors rate Germany Europe's best

Germany is behind only China and the USA as a destination for foreign investment, a study has shown. READ  

Cologne evacuates 20,000 after bomb find
The bomb is burrowed deep in the ground. Photo: DPA

Cologne evacuates 20,000 after bomb find

Authorities In Cologne have begun the biggest evacuation since Second World War of around 20,000 people after a 1,000 kg bomb was found in the north-east of the city. READ  

Merkel 'deceived' public on No-Spy treaty
Photo: DPA

Merkel 'deceived' public on No-Spy treaty

Chancellor Angela Merkel's government tricked the public into believing the USA was prepared to sign a so-called 'no-spy agreement' with Germany ahead of elections in 2013, a report in the Süddeutsche Zeitung claimed on Wednesday. READ  

Forbes: Merkel still world's mightiest woman
Photo: DPA

Forbes: Merkel still world's mightiest woman

Chancellor Angela Merkel tops the Forbes list of the world's most powerful women for the fifth straight year but Hillary Clinton is snapping at her heels, the magazine said on Tuesday. READ  

German public shop with renewed confidence
People throng the halls of the Milaneo shopping centre in Stuttgart. Photo: DPA

German public shop with renewed confidence

Consumer confidence in Germany is at its highest in 13.5 years, as the positive economic outlook and low inflation persuade consumers to open their purses, a poll found on Wednesday. READ  

Shocked fishermen hook a shell of a catch
Locals enjoy the normally tranquil Seeburger See

Shocked fishermen hook a shell of a catch

A couple of friends who went for a quiet spot of fishing on Lake Seeburg in Lower Saxony on Monday got the fright of their life when they pulled up their net to find an artillery shell inside. READ  

10 facts to celebrate Leipzig's 1,000th birthday
Leipzig's impressive skyline. Photo: Wikimedia Commons

10 facts to celebrate Leipzig's 1,000th birthday

This weekend the city of Leipzig is celebrating its 1,000th anniversary, since it was first mentioned by the chronicler Thietmar of Merseburg in 1015. The Local gives some insight into one of Germany's most vibrant cities. READ  

Police tighten borders ahead of German G7
File photo: DPA

Police tighten borders ahead of German G7

German authorities have reintroduced border controls two weeks before the leaders of the G7 economies gather in Elmau, southern Bavaria. READ  

North Germany feels pain of Russia sanctions
Photo: DPA file photo

North Germany feels pain of Russia sanctions

Schleswig Holstein's exports to Russia have dropped by 31 percent, state finance minister Reinhard Meyer said in comments reported by the Hamburger Abendblatt on Tuesday. READ  

German twins die fighting for Isis in Iraq
The twin brothers are both reported to have died in suicide attacks. Photo: Dabiq magazine

German twins die fighting for Isis in Iraq

German twins from Castrop-Rauxel in North Rhine-Westphalia have died fighting for the Islamist group Isis in Iraq, the militia's official magazine reported in its latest publication. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Travel
Why the train strike is bad for passengers and workers
National
Meet Germany's Eurovision hope
Business & Money
Is 2015 a new moment for jobsharing?
Features
How the LGBT rights movement was born in Germany
National
Why you don't make bomb jokes at the airport
National
Why Germany needs a little less tipple
National
Who Germans and Americans trust... and don't
Politics
What the UK election means for Germany
National
Why Germany is great for mums
Features
The Germans with GI dads
Five ways Germany falls short on gay rights
Travel
Giant tortoise found riding Munich rail
National
FCK CPS? A-OK with court
Politics
Opinion: Brexit's dangers for Germany
Features
Smart kids all want to work for BMW
National
Minister shows off top Denglisch
National
Germany's 'other genocide' in Africa
National
Arms firms get a 'must do better' mark on ethics
Sport
Bayern's anticlimactic 25th Bundesliga win
Politics
A Greek learning politics in Germany
Features
The battle of the "Gates of Berlin"
National
Germany's 'very poor' lobbying record
National
Germany's favourite baby names of 2014
Politics
Merkel's 15 years at the top of German politics
Travel
Lowest of the low: how woman exploited Germanwings crash
Features
Spice up asparagus season with The Local's serving suggestions
Sport
Football and the €30,000 firework
Technology
Why scientists oppose killer robots
National
'Cannibal cop' gets 8 years
National
Which city is Germany's worst for drivers?
Technology
Electrifying 'Ostalgia'
National
Cologne Cathedral returns from space
Pupils mourn lost classmates
National
Freed after 25 years on death row
Shutterstock
Sponsored Article
10 things you didn’t know about Zagreb (and why you should go)
Is your workload 'out of control'? You're not alone...
Sponsored Article
What expat parents should ask before choosing a school
Features
Paddy's Day, Berlin style
National
Why east Germans are happy to get it on on camera
National
Uplifting thoughts to get you through the last week of winter
National
What would you do with a 250-year-old pretzel?
National
Who wants the Olympics more - Hamburg or Berlin?
Features
Just why is the German flag Schwarz, Rot, Gold?
Business & Money
Getting German workers and bosses thinking positive
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

6,641
jobs available
Toytown Germany
Germany's English-speaking crowd