Plan to save the eurozone sparks row
Published 24/11/2011 | 08:00
Treaty-changing plans for eurobonds as a way out of the economic crisis have kicked off a new political storm.
German Chancellor Angela Merkel (below) insisted that ambitious European Commission ideas in a green paper offered the wrong remedy at the wrong time and made clear she would not support them.
Dutch finance minister Jan Kees De Jager said eurobonds were no magic solution to the crisis "and could even worsen it".
He and Ms Merkel both said the focus should be on better supervision and enforcement of eurozone budget discipline - something the commission also proposed yesterday.
A package of monitoring measures extends tighter controls announced earlier this year to impose tougher reporting requirements between eurozone treasuries and Brussels - and all euro area governments would have to put in place "independent fiscal councils", as well as basing their budgets on "independent forecasts".
The UK government kept out of the eurobonds exchanges yesterday but a spokesman said: "We've been clear that the eurozone has to face up to its responsibilities and that both the individual members of the eurozone and the institutions of the eurozone need to find a sustainable solution to the current crisis, but it is not for us to dictate how they do this."
UK Independence Party leader and MEP Nigel Farage was more outspoken.
"The Eurobond proposal would render all future general elections within the eurozone totally meaningless," he said.
"However, it is not going to happen because the Germans have said no, and they are in charge. Commission talk about eurobonds is just eurobluster."
The options for euro bonds and the economic governance package both "miss the point", according to Jan Zahradil, leader of the European Conservatives and Reformists group - which includes the UK Tory MEPs - in the European Parliament.
A commission official said most of the plans and ideas could be carried out without changing the EU Treaty - except the "Green Paper" idea of replacing national bond issues with Eurobonds.
Another option - a mix of Eurobonds and national bonds - would not require Treaty change.
The Commission has chosen to call the bonds "Stability bonds" - in the hope of achieving some of the stability the eurozone is desperately seeking.