BRUSSELS (MNI) – Greece and a number of countries back the idea of
common Eurozone bonds, Greek Prime Minister Georgios Papandreou said on
Monday.

Eurogroup President Jean-Claude Juncker and Italy’s Finance
Minister Giulio Tremonti have tabled a plan for a euro-bond, suggesting
that the current crisis could be ended with the creation of a European
Debt Agency, which could issue common Eurozone bonds.

Germany is one of the opposers of the idea, which will be debated
at this afternoon’s meeting of the 16 finance ministers of the Eurozone,
attended by EU Economic Affairs Commissioner Olli Rehn and ECB President
Jean-Claude Trichet.

“This is a proposal that we have also accepted, Greece has also
been positive and this is also a Greek decision, I know that there are a
number of countries that have accepted this or that have proposed this
in different forms and manners,” Papandreou told reporters in Brussels.

“I think that we need to seriously discuss this issue, do it in a
way which is organised, and which is responsible,” he said. “If there is
an understanding and a consensus, I would think that this would be an
important step for a wider and more robust economic governance
facility,” the Greek prime minister added.

Papandreou was in Brussels for a meeting with European Commission
President Jose Manuel Barroso.

“The idea of eurobonds is an old idea,” Barroso said. “It was never
possible to come to an agreement, that is why, before commenting on this
latest proposal, I need to be more sure about the political
feasibility,” he said.

Barroso paid tribute to Greece’s prime minister, who is currently
implementing a strict austerity plan in return for an EU/IMF aid deal
worth E110 billion over three years.

Papandreou “has grasped the nettle of economic reform in his
country, he is delivering, not just committing,” Barroso said, adding
that “The Commission stands fully behind the Greek government.”

“Greece is on track to deliver on its reform agenda,” Barroso said.
“The economy should improve in 2011, wage and price inflation is
beginning to moderate, setting the stage for improvement in
competitiveness.”

“All our efforts are directed towards moving out of this crisis,”
Papandreou said. “We very much intend to adhere to the path that we have
embarked upon.”

Greece is one of two eurozone countries forced to ask for aid to
help manage its debt burden. Last month Ireland was offered E85 billion
in loans to help with its debt and banking sector restructuring.

Barroso said the European Council had decided that the “maturities
of loans to Greece and to Ireland have to be aligned.”

“This was a crucial decision for the credibility of the programme,”
he said, adding that the technical details of that move would be
finalised soon.

–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com

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