Germany denies change of stance on joint euro bond

BERLIN (BestGrowthStock) – The German government denied on Saturday a magazine report that Berlin might agree to issuing joint euro zone bonds to help ease the debt crisis gripping weaker economies in the 16-nation currency union.

Focus magazine cited an unnamed official as saying Berlin might drop its objections to an idea championed by Eurogroup President Jean-Claude Juncker, who believes it would help countries such as Greece, Ireland and Portugal.

But German officials, including Deputy Chancellor Guido Westerwelle, said Berlin was still firmly opposed to the idea of joint borrowing. It worries that the proposal would imply taking responsibility for the debts of the bloc’s weaker economies.

“Our government is against common European bonds because we don’t want Europe becoming a transfer or liability union,” said Westerwelle, who is also foreign minister and head of Chancellor Angela Merkel’s Free Democrat coalition allies.

He told reporters at a regional party rally that the answer to the debt problems was stricter sanctions for breaking euro zone deficit and debt guidelines.

“Those who don’t look after their economy at home have to know it will have consequences,” said Westerwelle.

One parliamentary finance expert for Merkel’s conservatives, Norbert Barthle, said the joint euro zone bond idea enjoyed no support on the government benches.

Another government official, who asked not to be named, said such bonds would only be meaningful instruments if the 16 member nations had joint finance and budget policies.

“This government believes the euro bond issue is not up for discussion,” said the source.

(Reporting by Matthias Sobolewski and Andreas Rinke; writing by Stephen Brown; Editing by Ruth Pitchford)

Germany denies change of stance on joint euro bond