BERLIN (MNI) – ECB Governing Council member Axel Weber on Friday
criticized a proposal for issuing joint eurobonds to support fiscally
ailing Eurozone member states.
In remarks prepared for delivery at a celebration of the stock
market in Munich, the Bundesbank president repeated his call to stiffen
fiscal rules in the EU Stability and Growth Pact.
“Against this background, the recently frequently discussed
issuance of eurobonds has to be seen very critically because the joint
liability foreseen in these proposals would undermine fiscal
responsibility and would not strengthen confidence in public finances,”
Weber reasoned.
The existing EU rescue measures are more apt to overcome the
current crisis, he argued.
The Governing Council member warned that “if deficits are not
swiftly reduced there is the threat — beyond the immediate stability
risks — of a lasting increase of the interest rate level which would
further hurt production potential.”
In any case, it can be expected that interest rates will rise
compared to the unsustainable pre-crisis levels, Weber said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
[TOPICS: M$$EC$,M$X$$$,M$$CR$,M$G$$$]
