Responding to the Commission Green paper on the "feasibility of the introduction of stability bonds", whose publication was obtained by the EP as part of the '6 pack' negotiations, the EP Rapporteur Sylvie Goulard (Modem, France) has submitted, today, her draft report that will be discussed this month in the Economic and Monetary Affairs Committee.
For Mrs Goulard the core message is clear: "The primary goal is to ensure sustainable discipline, founded on liquid markets, which reflects the respective solutions of the Member States. The development of an EU bond market must serve stability, provide safe assets for investors and protect the ECB by allowing it to focus on monetary policy". Taking into account the various efforts made so far to reinforce mutual budgetary surveillance and macro-economic convergence - the '6 pack', the 'fiscal compact' and the '2 pack', continued the EP rapporteur: "A 'roadmap' which imperatively links all progress towards Eurobonds with budgetary stabilisation and economic convergence can now be planned".
Mrs Goulard's report presents proposals for the short to the long term with the future and final goal of issuing genuine common European bonds.
In the immediate future, Mrs Goulard urges Member States to tackle the urgent issue of rising spreads and volatility, by seriously considering the establishment of a temporary European Redemption Fund - along the lines of the proposal of the German Council of Economic Experts - and the immediate issuance of common short-term debt in the form of eurobills - Hellwig/Philippon proposal. "These instruments would respectively reduce the excessive debt by using the interest rate saving and protect Member States from illiquidity runs and break the link between the sovereign and banking crises".
In a second phase and under the existing Treaties, Member States could endorse the Blue bond proposal of Delpla-Von Weizsäcker. "The success of this instrument lies in the setting of precise principles - excluding Member State participation if under an existing adjustment programme, the prohibition of issuing senior debt outside the common issuance, the compulsory allocation of collateral representing the Member State's debt issued in common and the set up of an allocation mechanism based on the respect of fiscal discipline".
To go further a Treaty revision is necessary, which could be prepared following the method used for the single currency, namely a "Delors Committee" with the participation of the ECB and the legitimisation through the European Parliament.
Once discipline and macro-economic convergence are underway, Mrs Goulard proposes that in the medium-term a change of Treaty can be finally envisaged in order to issue eurobonds.
"Whatever the options, the Council can no longer avoid this discussion. After all, the crisis of our single currency is also due to the absence of a common fiscal policy and a common bond market", she concluded.
