Joint debt liability mooted

ECB governing council member Jens Weidmann says common euro bonds or joint debt liability could be established in the currency area in the context of a true fiscal union.

“If a framework was credibly established that reliably ensured the adherence to fiscal rules, then a common liability by the euro member states could be introduced,” Mr Weidmann said yesterday in Mannheim. “That could, for example, entail jointly-guaranteed or partially-guaranteed government bonds or a banking union.”

European policymakers are debating the future design of a more integrated single currency as a debt crisis that has seen four countries appeal for bailouts highlights its shortcomings.