November 24, 2011
There were some who thought that Angela Merkel might soon soften her stance on euro bonds. But on Thursday, the German chancellor once again emphasized her opposition. Why, though, is Berlin so adamantly opposed to issuing joint euro-zone debt? SPIEGEL ONLINE offers an overview.
Angela Merkel's response could hardly have been clearer. European Commission President Jose Manuel Barroso on Wednesday presented a study outlining the possible forms euro bonds could take -- whereupon the German chancellor found unusually unambiguous words in response. The proposal, she said, was "extraordinarily distressing." She also called it "inappropriate."
The reaction was unusually firm for Merkel. She has become notorious in Germany for shying away from positions that can't be wriggled out of later. But when it comes to pooling the debt of all euro-zone member states in the form of euro bonds, she has long been firm in her rejection. In December 2010, for example, she said "the euro zone needs more harmony and competitiveness rather than common euro-zone bonds." In September, she called euro bonds "absolutely wrong." Wednesday's outburst, in other words, should not come as a surprise.
There are those, of course, who think that, in the end, Germany will have no choice but to put its own AAA credit rating on the line to ensure that other members of the European currency union have access to cash at reasonable rates. Borrowing rates for several euro-zone countries have risen alarmingly in recent weeks -- including yields for countries like France and Austria that had long been considered financially solid. Both Spain and Italy have seen borrowing rates spike to near or above 7 percent, the amount analysts consider to be the limit for sustainable long-term borrowing.
More
No comments:
Post a Comment