Barroso says Eurobonds will ‘be seen as natural’
Barroso says Eurobonds will ‘be seen as natural’
Commission president says he will present a green paper on ‘euro stability bonds’ next week.
José Manuel Barroso, the European Commission president, has said that Eurobonds “will be seen as natural” once the eurozone’s economies achieve greater convergence.
Speaking to MEPs in Strasbourg yesterday (16 November), Barroso said he would present a green paper on “euro stability bonds” on 23 November that would “present and assess options for the joint issuance of bonds” by eurozone member states.
Barroso said that “euro stability bonds will be seen as natural when we achieve our goal of reinforced governance and…discipline and convergence” in the eurozone.
Issuing a joint Eurobond would allow countries to obtain financing from the financial markets at a lower interest rate than if they were selling just their own bonds.
Germany strongly opposes the idea of Eurobonds, fearing that joint bonds would reduce the market pressure on countries to keep their public finances under control. The largest party in the German government, the centre-right Christian Democratic Union, this week adopted a resolution rejecting Eurobonds.
Economic governance
Barroso said he would publish the paper on Eurobonds at the same time as two initiatives to strengthen economic governance in the eurozone.
One will be a regulation for closer surveillance of countries requiring financial assistance.
The other would enable the Commission and eurozone governments to examine national budgets before they are adopted by national parliaments and recommend changes. Eurozone countries that have breached the limits on debt and deficit levels would be placed under closer scrutiny.
Barroso said that “increased surveillance by the Commission will lead unavoidably to a greater role in domains previously restricted to national governments or parliaments”. But, he continued: “This is necessary and indispensable if we want to have a common currency.”
The fundamental lesson of the crisis had been that “when things go wrong the consequences are felt far beyond national borders”.