Italy calls for creation of euro bonds: report
Sam Mamudi, MarketWatch
Reuters reported that Giulio Tremonti said that such bonds would have prevented the continent from reaching the point it has, with Greece, Ireland and Italy among countries pushing through austerity measures in the hope of avoiding sovereign defaults.
Tremonti said joint-issued bonds would make nations’ debt a shared burden, and was quoted by Reuters as saying that they would be “master solution” to the crisis.
“We would not have arrived where we are if we had had the euro bond,” Reuters quoted him as saying on Saturday.
But German Finance Minister Wolfgang Schaeuble reportedly rejected the call, said Reuters.
“I rule out euro bonds for as long as member states conduct their own financial policies, and we need differing interest rates so that there are possibilities of incentives and sanctions to force fiscal solidity,” Schaeuble told Der Spiegel weekly according to Reuters.
The sovereign debt crisis of euro-denominated countries has bubbled away for more than a year. Just in the past week, the European Central Bank purchased Italian and Spanish bonds as part of an effort to keep down the countries’ borrowing costs. On Friday, Italy’s cabinet approved measures to balance the country’s budget which included sweeping spending cuts, increased taxes, and changes to the pension system. .
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