German central bank chief warns against eurozone bond

17th December 2010, Comments 0 comments

The head of the German central bank warned Friday against a proposed common bond for the eurozone, saying it would shift the responsibility of members for their own finances.

"We must look very critically at the recent discussion about euro bonds because proposals in this direction ... would eliminate the responsibility of each country and would not reinforce confidence in public finances," Axel Weber said, according to the text of a speech giving in the southern city of Munich.

"The current European rescue instruments are much better adapted to fight the crises in the long run because they make short-term aid conditional on strict demands aimed at restoring solid public finances," Weber added.

European Union leaders meeting in Brussels agreed Thursday to put aside the proposal for so-called E-bonds for the time being, an idea to which Germany had already voiced strong opposition.

But they did approve treaty changes to allow the setting up of a permanent rescue mechanism to help eurozone member states after Greece and Ireland both needed bailouts this year.

© 2010 AFP

0 Comments To This Article