Commission publishes the first report on the issuance of a Eurobond

José Manuel Barroso, President of the European Commission participated in a debate about the future of Europe with 150 citizens in Brussels; the Pan-European Citizens' Dialogue. A lot of questions were asked about sharing financial responsibilities in the Eurozone. (EC Audiovisual Services, 27/03/2014).

José Manuel Barroso, President of the European Commission participated in a debate about the future of Europe with 150 citizens in Brussels; the Pan-European Citizens’ Dialogue. A lot of questions were asked about sharing financial responsibilities in the Eurozone. (EC Audiovisual Services, 27/03/2014).

With a brief report, an Expert Group formed by the EU Commission and mandated to study the issue of “a debt redemption fund and eurobills”, undermined the prospect of a Eurobond issuance, by refusing to formulate a policy proposal.

This is the story of the long time debated subject of the issuance of common and mutualized sovereign debt paper by Eurozone, namely the famous Eurobond affair. The denial of the ‘experts’ to formulate a policy proposal, means that the new concession of economic sovereignty by the Eurozone member states to Brussels – in the context of the new economic governance – will remain without a counterbalance in the sphere of mutualisation of financial obligations.

The ‘experts’ say that “Given the very limited experience with the EU’s reformed economic governance it may be considered prudent to first collect evidence on the efficiency of that governance before any decisions on schemes of joint issuance are taken”. Concerning the legal issues, the Expert Group’s report concludes that “without EU Treaty amendments, joint issuance schemes could be established only in a pro rata form, and – at least for the debt redemption fund/pact – only through a purely intergovernmental construction, which would raise democratic accountability issues”.

Ignoring the ‘acquis communautaire’

Yet in the case of the recently struck agreement between the Parliament, the Council and the Commission over the Single Resolution Fund, the three most important EU bodies delegated the governance of this Fund to an Intergovernmental Agreement. This Agreement is quite similar with the one the ‘experts’ say is needed for the issuance of the first Eurobond or Eurobill, but they refuse to propose it, because it “would raise democratic accountability issues”.

What kind of wise experts are those, having not noticed that the most important new European institution after the creation of Eurozone, namely the European Banking Union, is based on such an Intergovernmental Agreement? Presumably they haven’t noticed that the European Parliament has been questioning the democratic accountability of this Intergovernmental Agreement, on the grounds that it constitutes a creation completely outside the EU standard practices and functioning.

Yet the legislature took the right precautionary measures to secure an acceptable degree of democratic accountability for the IA. The MEPs finally accepted this new institutional creation outside the EU standards, just to pave the way for the trilateral agreement (Parliament, Commission, Council) with which the EU is about to accomplish its major new project, namely the European Banking Union.

Stubborn denial

Incidentally, the Single Resolution Fund will be endowed with €55 billion, a huge capital in every respect. Notwithstanding its huge volume, it will be run by an Intergovernmental Agreement, exactly like the one the ‘experts’ don’t seem to consider democratic enough for their own standards. The SRF will take care of the cost of winding down a Eurozone bank, after the lender is examined by the ECB and found as being beyond limit of repair. Actually after some years, the national segments of the SRF will merge into one. This truly single SRF will mutually undertake the obligations stemming from eventual bank resolutions, irrespective of the country in which the failing bank is conducting its main business.

Despite all this experience gained during the past twelve months by the three EU most important bodies in achieving this trilateral Agreement (Parliament, Commission, Council) for the creation of the Banking Union, the ‘experts’ refused to take stock of it. The Commission observes that “The report does not formulate policy proposals or recommendations, nor endorse explicitly or implicitly either of the two ideas”. The two ideas referred to here are the EU Treaty amendment and the intergovernmental construction. Either of them can serve as a legal base for the issuance of Eurobonds and Eurobills.

It’s always Germany

It is obvious that in this way the Commission shows its dismay over the refusal of the ‘experts’, to recommend either idea as a legal base for the issuance of Eurobonds and Eurobills. It must be noted though, that major economic commentators have repeatedly insisted that the only way for Eurozone to become a truly monetary union, catering for the needs of all its members, there has to be a common issuance of government debt.

Of course Germany has been vehemently opposing the mutualisation of Eurozone’s sovereign debt. Presumably, this ‘expert group’ report on a common debt redemption fund and eurobills, has succumbed to the insistence of its German members who must have denied any prospect for the issuance of Eurobonds or Eurobills.

In any case, this is just the first act of the story around the issue by Eurozone of a common Eurobond. The report published yesterday by those ‘experts’ is only the beginning.


the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Three tips for breaking through bias and seeing evidence more clearly

Indonesia has a plan to deal with its plastic waste problem

Mental health during COVID-19 outbreak: who takes care of health professionals?

JADE visits Lithuanian Junior Initiatives

Mobile technology saving lives: Changing healthcare systems with simple technology solutions

‘Historic’ new Syria talks should focus on relief for war-weary civilians, says UN negotiator

Brexit: new European Parliament reaffirms wholehearted support for EU position

Scientists can lead the fight against fake news

The refugee crisis seen through the eyes of a young doctor from Turkey

New research reveals the true extent of corruption in fisheries

New tech infrastructure will help economies recover after COVID-19

Pride in health care during Pride Month: Are we ready for a dignified health care for LGBTQI+ patients?

Survivors of ISIL terror in Iraq want justice, not revenge, says head of UN investigation team

Assassinations in Ethiopia amidst regional ‘coup’ attempt, condemned by UN chief

MEPs propose more transparent legislative drafting and use of allowances

How fintech is setting Southeast Asia’s SMEs free

Europe and UN form bulwark against ‘might makes right’ worldview, EU foreign affairs chief tells Security Council

Sustainable Development Summit: ‘We must step up our efforts – now’, Guterres declares

Dangers of poor quality health care revealed ‘in all countries’: WHO report

Independent UN rights expert calls for compassion, not sanctions on Venezuela

Why press freedom should be at the top of everyone’s agenda

Draghi indirectly accuses Germany of using double standards in financial issues

Why the UN is investigating poverty in the United Kingdom

Access to health in the developped and developing world

State aid: Commission approves Luxembourg guarantee measure to further support economy in coronavirus outbreak

Breaking news on European Youth Employment: European Youth Forum Guide tackles poor quality internships!

How three US cities are using data to end homelessness

Rule of Law: European Commission refers Poland to the Court of Justice to protect judges from political control

Mobile technology facilitating social distance in the middle of a pandemic

Sydney is choking on record levels of smog – and the bushfire season is just getting started

Smokers who quit one month before surgery reap benefits: UN health agency

European Youth Forum @ European Business Summit 2015: Why interns should matter to business

The first new university in the UK for 40 years is taking a very different approach to education

Societies must unite against ‘global crisis of antisemitic hatred’, Guterres urges

Four lessons from Africa on building effective business ecosystems

Scientists have created the world’s ‘first psychopath AI’

EU growth in 2015 to be again sluggish; Can the Juncker Commission fight this out?

Education should be like everything else. An on-demand service

Friday’s Daily Brief: human rights in Sudan, sombre anniversaries for Rwanda and Nigeria, and fears of ‘chaos’ in Libya

World Health Organization calls crisis meeting over deadly Ebola outbreak in DR Congo

So, what is your favourite Sustainable Development Goal?

An alternative to the future of antimicrobial therapy

Is Haiti better prepared for disasters, nine years on from the 2010 earthquake?

Syria: ‘Deplorable’ violence in Idlib against civilians, humanitarian workers must ‘stop immediately’: UN Coordinator

Bundestag kick starts the next episode of the Greek tragedy

Over $39 million earmarked by UN-backed fund to combat effects of climate change in Nepal

Digitalization is changing banking – These 3 trends will help shape its future

Europe is ready to engage, von der Leyen tells annual EU Ambassadors’ Conference

Coronavirus: EU Civil Protection Mechanism activated for the repatriation of EU citizens

A new generation of women leaders is making waves in the Arab world

Teenagers’ career expectations narrowing to limited range of jobs, OECD PISA report finds

State aid: Commission approves €30 million Estonian measure to support Nordica in the context of the coronavirus outbreak

UN spotlights digitization of audiovisual archives to preserve human history on World Day

The European Parliament fails to really restrict the rating agencies

Islamophobia is driving more US Muslims to become politically engaged, suggests report

AIDEX 2015: Humanitarian Hero Award Winner Announced

New UN-supported farming app is cream of crop in tackling Sahel pest

State of the Energy Union: Progress made on the clean energy transition and a basis for green recovery

We have solutions to crime. We just need to scale them

More Stings?


Speak your Mind Here

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s