Belgium calls for pan-eurozone bond to help Greece

Eurozone states should consider reviving the controversial idea of creating a joint bond that could be used to help Greece overcome its debt crisis, Belgium’s finance minister said Sunday.

Didier Reynders called for a “truly European solution” to the crisis as he dismissed talk of restructuring Greece’s massive debt or any Greek exit from the 17-nation single currency area.

He said the solution was a “eurobond” that would be backed by all eurozone states, an idea that first surfaced last year but which was staunchly opposed by Germany, Europe’s paymaster.

“I can understand the reluctance, notably in Germany, but it’s a solution that seems sensible to me. In any case, we will have European bonds sooner or later,” Reynders was quoted as saying by the Belga news agency.

“We must preserve eurozone unity. It would be absurd not to have this debate on eurobonds,” he said, noting that eurozone finance ministers hold their next meeting on June 20.

Greek Prime Minister Georges Papandreou called for the creation of a pan-European bond earlier this month as his government scrambles to prevent a new debt crisis, one year after obtaining a 110-billion-euro EU-IMF bailout,

The principle of a eurozone bond is that it would enable weak eurozone countries to link up with stronger countries such as Germany and France to borrow money, instead of being exposed alone when they issue their own national bonds to raise money from investors.