Tuesday

6th Dec 2022

Report: Germany wants 'elite' bonds for six euro-countries

Berlin is planning to team up with five other top-rated eurozone countries and issue joint 'elite' bonds, Die Welt newspaper reported Monday.

The 'elite' bonds would be issued by Germany, France, Finland, the Netherlands, Luxembourg and Austria - all with triple A assessments from credit rating agencies - in a bid to raise more money at low interest rates for themselves and, under strict conditions, for the troubled southern euro-countries, EU diplomats involved in the negotiations said.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • 'Elite' bonds instead of eurobonds? (Photo: bundeskanzlerin.de)

The UK is also being "closely" consulted on the matter, the article said.

The Sunday edition of the paper had reported that Chancellor Angela Merkel and French President Nicolas Sarkozy are involved in secret talks on creating a tighter fiscal union with the euro-area, a club of the 'super-Europeans' willing to abide by the strict budget discipline proscribed by Berlin.

An intergovernmental treaty, modelled on the one for the border-free Schengen area, would be signed by those willing to partake in this kind of set-up, not necessarily all 17 euro-states.

In what looks like a major shift by Merkel, the plans suggest that the European Central Bank would have a stronger role in rescuing countries.

The Welt am Sonntag's report suggests the chancellor is willing to soften its position on ECB lending after Berlin last week was unable to auction a third of its long-term bonds, suggesting Germany is also at risk of being sucked into the crisis.

Another possible plan would see a speeding up of the creation of the eurozone's permanent bail-out fund, the European Stability Mechanism (ESM), currently planned for mid-2013.

The ECB could lend to the ESM, which in turn would prop up troubled countries and circumvent Germany's concerns about the central bank's independence.

Finance minister Wolfgang Schaeuble, who is travelling to Brussels on Tuesday to meet his fellow eurozone ministers, has denied any such plans are in the making. “We want to solve these things within the treaties," he said, according to the Irish Times' Berlin correspondent.

In Paris meanwhile, Sarkozy's cabinet has been busy explaining to media that the mooted Franco-German plans are in no way going to give the European Commission "supra-national powers", as reported by Journal du Dimanche.

But it admitted in a press release that "intrusive" powers are being considered "for the surveillance of a country like Greece," adding that this would be done by the EU commission or the council of eurozone countries with advice from the commission.

"Not even Germany demands supra-national powers for the Commission," the statement claimed, after Journal du Dimanche speculated that Merkel convinced Sarkozy to put in place an economic government and reinforced budgetary discipline using the commission.

Italy sides with Germany against eurobonds

At Italy’s first invitation for an audience before the Franco-German duo that powers European decision-making, Prime Minister Mario Monti made it clear he backs the German position on eurobonds.

Brussels sees no serious opposition to eurobonds

The European Commission has launched a polemic on eurobonds - a proposal that eurozone countries should guarantee one another's debt, taking member states into uncharted territory in terms of solidarity and trust.

Stakeholders' Highlights

  1. Nordic Council of MinistersCOP27: Food systems transformation for climate action
  2. Nordic Council of MinistersThe Nordic Region and the African Union urge the COP27 to talk about gender equality
  3. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  4. Friedrich Naumann Foundation European DialogueGender x Geopolitics: Shaping an Inclusive Foreign Security Policy for Europe
  5. Obama FoundationThe Obama Foundation Opens Applications for its Leaders Program in Europe
  6. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos

Latest News

  1. EU countries struggle to crack Hungary's vetos
  2. Frontex expanding migrant route-busting mission in Balkans
  3. EU ministers in fresh battle on joint debt, after Biden subsidies
  4. EU: 'We'll see' if Moscow actually stops selling oil over price-cap
  5. Bad Karma
  6. Serbia now has no choice but to join EU sanctions on Russia
  7. Hungary's funds showdown in focus This WEEK
  8. EU must break Orbán's veto on a tax rate for multinationals

Join EUobserver

Support quality EU news

Join us