Greece’s Prime Minister says support is growing for the creation of euro zone bonds to help cut funding costs for troubled member states like his.
At a conference at the French Economy Ministry in Paris, George Papandreou said jointly issued euro bonds could be one way of addressing the single currency area’s sovereign debt crisis.
He said: “Euro bonds are not a substitute for this necessary adjustment we are making in each of our countries, including in Greece, but they can serve as an effective complementary means to help resolve the euro area debt crisis.”
France may be warming to the idea and is backing a favourable report being sent to be considered by an EU working group on the reform of European economic governance.
At the conference, French Prime Minister Francois Fillon said: “I’d like to remind you that this crisis is not a euro crisis. The euro is indisputably a strong currency, it’s the second world currency, it’s become one of the main reserve currencies. This crisis is more a crisis of confidence with regard to certain countries of the euro zone.”
At the same time a poll of economists carried out by Reuters found most expect debt-burdened Portugal will need a European-led bailout as Greece and Ireland have, however most think that Spain will be able to avoid such a rescue.