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Not for turning: Germany says eurobonds are ‘completely inappropriate’

A spokesman for Angela Merkel has reiterated the Chancellor’s opposition to the pooling of eurozone debt, an idea gaining growing support among other eurozone nations.

Angela Merkel speaking to the media last week.
Angela Merkel speaking to the media last week.
Image: Markus Schreiber/AP/Press Association Images

GERMANY HAS REITERATED its opposition to the introduction of eurobonds with a spokesperson for the German chancellor Angela Merkel saying they could only be considered “after several years” of steps towards greater integration by eurozone members.

The comments come despite growing calls for the introduction of the pooling of eurozone debt in order to alleviate the current crisis among country’s in the single currency, calls echoed by Italian Prime Minister Mario Monti at the weekend.

“We are talking about several years and certainly not a solution that we are thinking about in the current problematic situation,” Merkel’s spokesman, Steffen Seibert, told a government news conference.

Broadly, eurobonds are a proposal that would involve countries in the eurozone pooling some of their debt which would be underwritten by all countries as opposed to each individual member as it presently stands.

This would allow for troubled nations, such as Ireland, to have cheaper borrowing costs.

Supported by France, whose newly-elected president Francois Hollande believes they are a solution to the crisis, Germany – whose borrowing costs would rise if they were introduced –  is steadfastly against them believing it would be picking up the tab for profligate nations in debt.

Seibert added that in the current climate the eurobonds idea was, in the view of the German federal government, a “completely inappropriate means to bring Europe out of the crisis.”

He added that it would take “several years” and greater political integration before it would be conceivable that eurobonds could be considered.

- with reporting from AFP

Read: ‘We have to get a deal on our bank debt’ – Tánaiste

Read: Eurobonds will come sooner or later, reckons Mario Monti

Explainer: What are Eurobonds and why do they matter?

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Hugh O'Connell

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