BERLIN — The European Central Bank’s chief economist is arguing against the introduction of so-called eurobonds, which he says would reduce incentives for troubled countries to tackle budget problems.
Juergen Stark was quoted as telling Friday’s edition of Germany’s Handelsblatt newspaper that introducing joint eurozone bonds would be “a transfer of creditworthiness from stable, solid countries to states that have less solid state finances.”
Some, including the opposition in Stark’s native Germany, view at least the limited introduction of eurobonds as the logical solution to the eurozone debt crisis. But Chancellor Angela Merkel is against them — and her junior coalition partners, the market-oriented Free Democrats, oppose them vehemently.
Critics argue the bonds’ introduction would increase the borrowing costs of financially solid countries such as Germany, while allowing others to continue running up debt by reducing their financing costs.
