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EC's Barroso unveils eurobond plan

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Uploaded on Nov 23, 2011

President of the European Commission, Jose Manuel Barroso, on Wednesday unveiled the Commission's new proposal to issue eurobonds as opposed to national issuance by the 17 members of the euro zone. With this new plan, Mr. Barroso expects to decrease market fears on national sovereign debts and avoid continuous bail-outs of countries without financial stability.

"The joint issuance of debt in the euro area could bring tremendous benefits. It could lead to greater financial integration and to the creation of a much larger and more liquid bond market -- comparable to that which exists for United States Treasuries.", Barroso said. However, the Commission stated the the new plan comes together with a more intrusive national budgetary surveillance.

The new proposal comes when countries like Spain, Italy and France have seen their borrowing costs rise significantly.

Barroso's eurobonds hasn't so far convinced German chancellor Angela Merkel, who defends treaty changes rather than eurobonds as a more effective solution to the current debt crisis.

Barroso is calling for a public consultation to assess weather the 17 members of the eurozone could use the so-called "stability bonds" to raise money. "I would like to make an appeal for these discussions to be approached by all parties with an open mind and for them to be free of dogma.", Barroso said.

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