Eurozone bond would cost Germany 17 bln euros: report

13th December 2010, Comments 0 comments

Issuing a common eurozone bond would cost Germany at least 17 billion euros (22 billion dollars) more per year, the daily Frankfurter Allgemeine Zeitung (FAZ) said on Monday.

The newspaper did not cite the source for its figure but said Chancellor Angela Merkel "could count on it" during a European Union summit meeting in Brussels later this week.

Merkel is staunchly opposed to a proposal by Eurogroup chairman Jean-Claude Juncker of Luxembourg to issue common eurozone bonds, an idea backed by several countries in southern Europe.

France, the Netherlands and other EU members have said they too oppose the plan.

A common bond would lower borrowing costs for countries with debts and deficits that make them higher risks in financial markets.

But it would raise costs for those that have maintained tighter fiscal discipline.

According to the FAZ, the average bond yield, or interest rate, across the eurozone is 3.31 percent, whereas Germany now pays average interest of 1.73 percent to tap financial markets.

Merkel said Friday that "sharing interest rates and risks is not going to help us structurally."

"What is more important is more coherence in economic policy," she added during a joint press conference with French President Nicolas Sarkozy.

He took a similar position, saying: "Countries should be given responsibilities, not have them taken away."

© 2010 AFP

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