November 22, 2011
Brussels on Tuesday intensified pressure on Berlin to consider a new proposal for the implementation of euro bonds, but resistance from Merkel's center-right coalition remains fierce. Still, as the euro crisis grows increasingly dire, some German commentators feel that the chancellor will ultimately change her mind.
Stability bonds. That is the new moniker given by the European Commission to euro bonds as it moves toward presenting its most definitive proposal yet for the debt pooling measure on Wednesday.
Indeed, European Economic and Monetary Affairs Commission Olli Rehn was in Berlin on Tuesday to tout Brussels' three-option studyon how bonds issued jointly by the 17 euro-zone member states could help stem the debt crisis.
He did so carefully. Chancellor Angela Merkel remains adamantly opposed to euro bonds, worried as she is that Germany would be disproportionately burdened. Instead, she insists that a clear commitment to rigid fiscal discipline, combined with the euro backstop fund, will be enough to calm markets.
"While the prospect of introducing stability bonds could help alleviate the sovereign debt crisis, I am also aware of the sometimes strong opposition against these ideas," Rehn told a conference of Germany's employers' association. With a nod to Merkel's concerns, he added: "Let me be clear with this ... it is clear that any type of euro bonds would have to go in parallel, hand in hand, with a substantially reinforced fiscal surveillance and policy coordination."
Any such plan would also be "balanced by provisions that ensure sustainable public finances and avoid freeriding on the consolidation efforts of other member states," he said.
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