BRATISLAVA, December 4, (WEBNOVINY) – The European Union will have to agree to issue joint euro bonds from the long-term perspective, European Commission Vice President Maros Sefcovic told Slovak journalists. “The European Union will have to look for solutions like the U.S.A. had to seek after its big crises it went through at the beginning, while they led them to creating U.S. bonds covering all U.S. states,” Sefcovic said. Selling joint euro bonds is, according to him, closely related to the current Brussels’ plan to create an economic and fiscal union. “In the long run, it would mean that we would be able to create perhaps even a bigger bond market than the U.S.A. has”, the EC commissioner said.
Sefcovic pointed out that joint euro bonds are connected with a moral hazard as if they are launched too soon, troubled countries will not be motivated to consolidate their public funds and adopt structural reforms. The EC is therefore trying to enhance discipline and respect for macroeconomic rules by new directives and a draft new fiscal regulation, the EC vice president explained. Within these rules, the EC has strengthened its supervision over national budgets, including sanctions.
Germany is the strongest opponent of joint euro bonds. According to Sefcovic, the country may change its position if member states agree on adopting new rules of fiscal and macroeconomic discipline.
According to the EC vice president, future standing of Slovakia within the EU and eurozone will depend on several factors, including the law on the state budget for 2012 and the law on the debt break. “It is the first clear evidence of how Slovakia is prepared to observe macroeconomic discipline, which is being strongly re-introduced in the EU and in particular in the eurozone,” he added. An important step will be also Slovakia’s position on the new EC draft to introduce stronger control over national budgets and tougher sanctions, Sefcovic concluded.
SITA