Spain rejects eurozone bond: report

12th March 2009, Comments 0 comments

Spain is not ready for a joint bond issue to help members resist the financial crisis, says Spanish finance minister in a newspaper interview.

FRANKFURT – The 16-nation eurozone is not ready for a joint bond issue to help members resist the financial crisis, Spanish Finance Minister Pedro Solbes said in an interview on Thursday.

Solbes added that eurozone members could however better coordinate their individual issues.

"To begin with, there is going to be an enormous amount of public and private borrowing," he told the business daily Handelsblatt.

"A certain coordination of the calendar would be pertinent so all do not issue (debt) at the same time," the finance minister suggested.

The idea of a pan-European bond issue, which is backed by the European Commission, has resurfaced as public deficits swell to finance government stimulus plans.

Germany opposes the idea however, because it benefits from the lowest market rates owing to its prudent fiscal management while countries with large public deficits must pay more for loans.

A eurozone bond would "increase interest charges by EUR 3 billion per year. We do not have that money," German Finance Minister Peer Steinbrueck told German newspaper General Anzeiger on Wednesday.

AFP / Expatica

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