The German and French governments have ruled out eurobonds as a solution to the euro-zone debt crisis. The German minister for finance, Wolfgang Schäuble, said: “I rule out eurobonds for as long as member-states conduct their own financial policies, and we need different rates of interest in order that there are possible incentives and sanctions to enforce fiscal solidity.”
French officials said that
“eurobonds would require a much more determined integration of budgetary policy. We do not have that today. It could be a long-term project, but you cannot have eurobonds and at the same time national economic and budgetary policies.”
The minister for finance, Michael Noonan, has stated his preference for a system of guarantees that would allow Ireland to obtain access to global bond markets again at competitive rates of interest but is “available for a discussion on the eurobonds.”
In the Financial Times, Richard Milne argues,
People’s Movement · 25 Shanowen Crescent · Dublin 9 · www.people.ie · 087 2308330 · post (at) people (dot) ie The People’s Movement has launched a new pamphlet entitled The European Stability Mechanism and the case for an Irish Referendum.
“As Keith Wade of Schroders deliciously points out, Europe has had a form of pseudo-Eurobonds in the recent past. After the single currency was introduced in 1999, interest rates for all countries soon converged to that of the strongest, Germany, and stayed there until about 2007. In fact, many of the smaller countries briefly saw their borrowing costs duck below those of Berlin. This loose form of Eurobonds, of course, laid the foundations for the current euro-zone crisis.”