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Austria joins Germany in opposing Eurobonds, won’t sacrifice ratings to help France


Bloomberg

Austria’s Finance Minister Maria Fekter said she opposes joint euro-area bonds as they would cost the Alpine republic more interest.

“Like my colleague Schaeuble I am against euro bonds,” Fekter told reporters in Vienna today. “I’m not willing that Austria should potentially pay twice as high interest as we currently do. As long as fiscal discipline of the euro nations isn’t completely complied with, as long as stability isn’t really really reached, as long as there is no direct influence on how the states run their finances and which fiscal measures they set, I won’t sacrifice the Austrian credit rating.”

European Union leaders meet tomorrow in Brussels where German Chancellor Angela Merkel faces growing pressure to ease up on austerity measures after three years of the debt crisis crimps expansion. Newly elected French President Francois Hollande has said he plans to discuss common euro-area bonds at the meeting, while Merkel has rejected issuing such bonds, saying that eliminating the gaps in bond yields would remove the incentive for weaker countries to overhaul their economies.

Fekter said she was is less opposed to a test phase for EU guarantees of “project bonds” sold by private builders of infrastructure.

“This growth impulse shouldn’t be built on new debt, but use existing funds, for instance the billions in the Structural Funds, for this,” she said. “One should very thoroughly check how sustainably this money was used until now for jobs, for growth.”

To contact the editor responsible for this story: Zoe Schneeweiss atzschneeweiss@bloomberg.net

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