FRANKFURT/PARIS (MNI) – The summit of EU leaders, which begins
today in Brussels, will not reach any conclusion on the proposal for a
common Eurobond, Jean-Claude Juncker, the head of the Eurogroup and
Prime Minister of Luxembourg, said in an interview with a German
newspaper.
“We will not intensively discuss the topic and won’t make any
decisions,” Juncker told the Handelsblatt. But Juncker, who floated the
proposal two weeks ago along with Italian Finance Minister Giulio
Tremonti, said he will nonetheless raise the topic of Eurobonds, because
“they would make the euro safer and more stable.”
He argued that a “homogenous, large Eurobond market with higher
liquidity would be advantageous for all euro countries. It would draw
capital from other parts of the globe to Europe, which would mean lower
interest rates for all, including Germany.”
However, Juncker added that such collective debt instruments are
not an instrument for the negligent. “Of course, Eurobonds would not be
possible without strict conditions,” he said.
The Eurobond seems unlikely to win approval of EU leaders, since it
is opposed both by Germany and France, the bloc’s two largest nations.
In a separate interview with France’s RTL radio, Juncker said
financial markets “have lost sight of the fundamentals of Europe.” He
said there is “not a euro crisis, but there is a grave sovereign debt
crisis in some countries.” The markets, he said are focusing on the
weaknesses of Europe.”
Among those weaknesses are the large debts and deficits of many EU
member states, which have been aggravated by the financial crisis and
associated recession, he said. Junker told RTL that there is no
alternative to cutting budget deficits, though he said he agreed with
unions who have warned recently that budget cutting should not be at the
expense of growth.
Europe needs the right combination of “solidity and solidarity,”
Juncker said. The Eurobond idea could help achieve that, he argued.
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