Brussels, 22/12/2010 (Agence Europe) - French liberal MEP Sylvie Goulard, rapporteur on one of the items of draft legislation in the economic governance package, says it would not be healthy for the eurobonds idea to be discussed in the media, at the EU Council of Ministers and in the member states, but to be banned at the European Parliament. She sees three reasons for the joint emission of eurobonds. Firstly, it would restore market discipline rather than encouraging excess debt. It would send a signal of solidarity without any relaxation of discipline to the financial markets by pooling only a section of each eurozone country's debt. She says that all debt above the 40% cut-off point would have to be funded from the financial market in line with each eurozone country's credit rating. This would give rise to a European bond market of global dimensions, with greater liquidity. She explains in her draft report that the cost of rolling over the debt of the good countries like Germany would not necessarily be any higher if the European bond market is large enough. Finally, the European Central Bank would no longer have to play its current role of buying up stocks of bonds from struggling countries at high prices.
To strengthen public finance discipline, Goulard wants decisions to be taken automatically wherever possible except where opposed by a qualified majority at the Council. Goulard suggests that a European Monetary Fund (EMF) should be set up, which would receive the fines and deposits that a eurozone country would have to pay out for infringement of the revised Stability and Growth Pact. The EMF could serve as a permanent mechanism for extending the EU temporary crisis management mechanisms. (M.B./transl.fl)