Al Hilal advances to AFC Champions League knockout stage despite 1-1 draw with Al Sadd    Finance minister: All Vision 2030 projects have sustainable funding that won't affect public finances    Crown Prince announces medium-term debt strategy to diversify funding sources "A resilient economy capable of overcoming challenges reflects progress towards achieving Vision 2030 goals"    'No excuses' for Israel to not accept ceasefire deal, EU foreign policy chief says    Alkhorayef highlights role of National Initiative for Global Supply Chains in boosting Saudi economy    Saudi Arabia signs investment deals worth SR35bn with foreign firms to strengthen global supply chains    Saudi Arabia unveils updates on Expo 2030 Riyadh master plan at 175th BIE General Assembly Riyadh Expo Development Company established to oversee strategic planning, operations, and legacy development    Riyadh Season draws 8 million visitors in 6 weeks    Saudi FM attends Quadripartite meeting on Sudan in Italy    Gangsters block aid distribution in south Gaza    Russian deserter reveals war secrets of guarding nuclear base    Georgia's new parliament opens first session amid mass protests and boycott    Best-selling novelist Barbara Taylor Bradford dies    Cristiano Ronaldo's double powers Al Nassr to 3-1 win over Al Gharafa in AFC Champions League    Al Ahli edges Al Ain 2-1, bolsters perfect start in AFC Champions League Elite    Al-Falih: 1,238 foreign investors obtain premium residency in Saudi Arabia    Most decorated Australian Olympian McKeon retires    Adele doesn't know when she'll perform again after tearful Vegas goodbye    'Pregnant' for 15 months: Inside the 'miracle' pregnancy scam    Do cigarettes belong in a museum?    Order vs. Morality: Lessons from New York's 1977 Blackout    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Merkel: Euro bonds won't solve debt crisis
Published in The Saudi Gazette on 16 - 09 - 2011

German Chancellor Angela Merkel bluntly rejected euro zone bonds on Thursday as a solution to the currency area's sovereign debt crisis, saying that “collectivizing debts” would not solve the problem.
The European Union's top economic official meanwhile said he expected international lenders to be able to recommend by the end of the month releasing a vital next tranche of aid for Greece, warding off the threat of an imminent default.
Spain and France both found good demand for their bonds at auctions, but while Paris' short-term borrowing costs fell, Madrid had to pay dearly to sell longer-term debt despite support from the European Central Bank in the secondary market.
Speaking a day after the head of the European Commission raised financial market hopes by pledging to present options soon for issuing such common bonds, Merkel said: “Eurobonds are absolutely wrong. “In order to bring about common interest rates, you need similar competitiveness levels, similar budget situations. You don't get them by collectivising debts,” she said in a speech at the Frankfurt auto show.
The chancellor, facing rising public opposition to euro zone bailouts, said there was no quick and easy way out of the debt crisis, only a step-by-step process of individual countries putting their fiscal house in order. Many investors see joint debt issuance as the best way out since it would reassure markets that Europe's strongest economies were taking responsibility for weaker states.
But Germany, the euro zone's main paymaster, argues that it would raise the borrowing costs of virtuous countries and remove the incentive for profligate states such as Greece or Italy to clean up their public finances.
European Central Bank policymaker Lorenzo Bini Smaghi highlighted that risk in a speech in Rome on Thursday.
“Without stringent constraints, eurobonds risk favouring fiscal policies that, on average, are more expansionary, and a higher debt, whose cost is also shared among the more disciplined countries,” he said.
On a conference call with Greek Prime Minister George Papandreou on Wednesday, Merkel and French President Nicolas Sarkozy voiced their support for keeping Greece in the euro zone and continuing financial assistance provided it sticks strictly to austerity measures to meet its fiscal targets. EU Economic and Monetary Affairs Commissioner Olli Rehn said he now expected an EU/ECB/IMF “troika” of inspectors to be able to complete their review of Greece's fiscal targets by the end of the month.
“Over the last weekend, the Greek government took very important decisions that go a long way to meeting the fiscal target for this year,” Olli Rehn told a news briefing.


Clic here to read the story from its source.