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Beecroft: Eurobonds "necessary" for future of euro
Saxo Capital Markets UK Chairman Nick Beecroft believes that Angela Merkel’s likely new coalition partner, the Social Democrats (SPD), will bring Eurobonds “back to the table”. They haven’t committed to do it, Beecroft says, but they have a different attitude to previous coalition partners.
Beecroft affirms that Eurobonds are a necessary condition to keep the euro together adding, the Eurozone needs a fiscal as well as monetary union for the euro to survive.
While it was a stunning victory for Merkel at Sunday’s German general election, the results raised the prospects of a grand coalition between Merkel's center-right group and either the Greens or the SPD. It is thought Merkel will seek a partnership with the Social Democrats (SPD) who won 26%. This party is seen as the most "pro-European" and have previously toyed with the idea of jointly issued debt in the Eurozone.
A Eurobond would operate in exactly the same way as a government bond, except that all 17 member states of the Eurozone would collectively guarantee the debt rather than a single government. The German government has always opposed the idea of issuing Eurobonds because it will simply make more expensive for Germany to borrow.
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Tags: angela merkel, bond markets, euro, euro economy, eurobonds, europa, eurozone, fiscal union, fx markets, german elections, monetary union, nick beecroft, pro-europa, saxo bank, saxo capital markets, saxo tv, spd, tradingfloor.com