BRUSSELS (MNI) – An agreement among Eurozone countries to issue
bonds with collective guarantees, commonly known as “Eurobonds,” could
have a positive impact on market sentiment and help lower the borrowing
costs of struggling countries, EU Economics and Monetary Affairs
Commissioner Olli Rehn told EU finance ministers meeting here Wednesday.
While acknowledging “a certain opposition” to what the Commission
calls ‘stability bonds,’ “an agreement on common issuance could have an
impact on market expectations and thereby lower funding costs for
countries under pressure,” Rehn argued.
Opposition to Eurobonds, in which taxpayers in stronger EU
countries would essentially be on the hook for debts incurred by
governments in fiscally-troubled countries, has been particularly sharp
in Germany.
Swedish Finance Minister Anders Borg, whose AAA-rated country has
committed to adopting the euro as its currency, said he saw Eurobonds as
“problematic.”
In contrast, Italy’s Prime Minister Mario Monti, attending the
meeting in his capacity as finance minister, stressed the importance of
the issue, saying that he “would like to underline the need to look into
this topic with a broad mind.” Joint issuance could have “benefits in
terms of further integration of the single market for financial
services,” he noted.
The finance ministers of Spain and Belgium, whose countries have
started to feel the heat of the Eurozone’s spreading financial crisis,
said they also supported the idea of Eurobonds.
–Brussels bureau: +32495228374; pkoh@marketnews.com
[TOPICS: M$$CR$,MFX$$$,M$S$$$,M$I$$$,MGX$$$,M$X$$$]
