Italy’s economy minister Giulio Tremonti said on Saturday that the solution to the Euro Zone’s current debt crisis was the creation of Euro Bonds.
The economy minister made the statement in a report published Saturday. In the report, Tremonti declared that such bonds would have prevented the continent from reaching the point it has, with Greece, Ireland and Italy among countries pushing through austerity measures in the hope of avoiding defaulting on their debts and risking a large scale downgrade of Europe’s economic credibility.
“We would not have arrived where we are if we had had the euro bond,” Tremonti declared in the report. Tremonti said joint-issued bonds would make nations’ debt a shared burden, and said that they could be “master solution” to the crisis.
But German Finance Minister Wolfgang Schaeuble reportedly rejected the call. “I rule out euro bonds for as long as member states conduct their own financial policies, and we need differing interest rates so that there are possibilities of incentives and sanctions to force fiscal solidity,” Schaeuble told German newspaper Der Spiegel weekly.
The sovereign debt crisis of euro-denominated countries has been underway for over a year now. Just last week, the European Central Bank purchased Italian and Spanish bonds as part of an attempt to maintain the countries’ borrowing costs at a low level.
On Friday, Italy’s cabinet approved measures to balance the country’s budget which included sweeping spending cuts, increased taxes, and changes to the pension system.