MEPs push for eurobonds, joint debt issue and taxes

MEMBERS of theEuropean Parliament are pushing for a commitment to create eurobonds, joint debt issuance and a financial transaction tax, as part of the price for the proposed EU treaty enforcing strict government budgets.

The wording of the contentious treaty that so far runs to eight pages is due to be completed within the next two weeks, but MEPs insisted on key changes at day-long talks with EU states yesterday.

While they cannot veto the treaty provisions, they are in a position to influence it and all three main political groups are insisting on changes to the original draft text from the council representing the member states.

They have inserted two articles dealing with pooling national debt issuance and creating eurobonds — something to which Germany, in particular, has been reluctant to commit.

They insist that the treaty must include agreement to adopt a roadmap to create “the institutional, economical and political conditions for issuing part of their sovereign debt in common, with joint and several liabilities”.

However, they do not insist on this going ahead immediately, but say it can happen once a “sustainable framework is in place”.

The second aspect is to create a national debt reduction fund aimed at helping countries with debt above 60% of GDP in the hope of tapping cheaper finance by pooling national debt issuance. This would be available to countries that have respected the rules on budgetary discipline.

Roberto Gualtieri, parliamentary socialist group representative at the talks, said the article on the national debt redemption fund, as well as clauses on introducing project bonds and a financial transactions tax, were designed to help economic growth.

The European Parliament is due to vote on the draft proposals on January 18, just two days before European Council President Herman Van Rompuy is to have the document ready, ahead of the Eurogroup finance minister meeting on January 23. It will then be discussed by EU leaders at a special summit on January 30 and finalised during their March summit.