The Battle over the Euro-Bond: Juncker Calls German Thinking 'Simple'
Germany has resisted calls for a joint Euro-Bond to help the euro zone's weaker members, but the chairman of the euro zone finance ministers says they need to study his proposal. Merkel's spokesman says they have.
German Chancellor Angela Merkel (L) and Luxembourg's Prime Minister Jean-Claude Juncker, Chairman of the Eurogroup, at a joint news conference in Luxembourg in March.
The chairman of euro zone finance ministers, Jean-Claude Juncker, challenged the German government on Wednesday to take a closer look at his proposal for issuing joint bonds for reducing weaker euro-zone states' borrowing costs.
The German government was swift to respond. Merkel's spokesman Steffen Seibert said it didn't help anyone to characterize the other as "un-European." He said that Juncker's proposal was not new, and had been studied by the German officials.
The proposal would include developing a new "European Debt Agency" to issue the Euro-Bonds. The bonds would be jointly put on the market by euro-zone states and would have advantages for the less-solvent nations because of their lower interest rates. For countries like Germany, which has solid credit-worthiness, it could mean paying higher rates than what they pay now.
Jitters over Policy Differences
On Wednesday, yields on German government bonds, the 10-year German Bund, rose to over 3 percent for the first time in seven months. Analysts attributed the rise, at least in part, to jitters over policy differences within the EU. Euro zone finance ministers have been unable to come to agreement this week to stem the euro crisis, in advance of an EU Summit to be held next week.
In the past, Juncker has made comments wary of Germany's European economic policies. "That in Germany federal and local authorities are slowly losing sight of European public good, that does worry me," Juncker told the newspaper Rheinischer Merkur last month.
mbw -- with wire reports
© SPIEGEL ONLINE 2010
All Rights Reserved
Reproduction only allowed with the permission of SPIEGELnet GmbH