Juncker says euro zone bond idea has virtues

BERLIN (BestGrowthStock) – The proposal to introduce common euro zone bonds should be analytically assessed because it has its virtues, Eurogroup chairman Jean-Claude Juncker said in a German TV interview to be aired later on Tuesday.

Juncker, who is prime minister of Luxembourg and chairman of the Eurogroup of euro zone finance ministers, added that talk of the euro’s existence being under threat is “unscientific blabber.”

“I would have preferred that these proposals would have been assessed more analytically,” Juncker told the German network Phoenix’s program “Unter den Linden.”

He added that the idea “has its virtues and that hasn’t become clear to everyone.”

Chancellor Angela Merkel has opposed the idea of issuing so-called E-bonds, saying it would remove the incentive for countries to balance their budgets and raise Germany’s own borrowing costs.

Juncker countered that view in the TV interview.

“It surprises me quite a bit that I’m being treated in the German press and in some parliamentary circles as someone who is leaving the pro-stability camp,” Juncker said.

“If there is a country that has most intensively been pushing for stability policies then that is Luxembourg,” he said. Juncker added that his ideas on E-bonds would remain on the agenda.

Juncker also said the euro was not in danger.

“The euro is not in a crisis. The euro is also not endangered. And I consider the talk out there about the euro’s existence being endangered to be unscientific blabber,” he said.

Juncker said the issue is only that there is a debt crisis in a few euro zone countries. The measures taken at the EU summit last week went in the right direction to resolve the debt crisis, he said.

Juncker said automatic sanctions are needed for budget offenders.

“It’s incredibly important that the preventive part of the Stability Pact is strengthened so that the Euro Group can intervene when the budget situation of a member starts heading in the wrong direction,” he said. “That’s why we need sanctions that take effect automatically.”

He added that he would like to see all euro zone governments taking that view more firmly — “also Germany and France.”

(Reporting by Erik Kirschbaum, Brian Rohan and Annika Breidthardt; Editing by Hugh Lawson)

Juncker says euro zone bond idea has virtues