By Desmond Hinton-Beales - 11th January 2012
The time has come for a new and deeper understanding of interdependence and accountability within an economic and monetary union
Olli Rehn
Chair of parliament's ALDE group Guy Verhofstadt has said that support among "major political forces" for the controversial eurobond scheme is on the increase.
Verhofstadt, speaking at the ALDE group's new year seminar in the European parliament, said he was a "strong believer" that a joint bond security system that "lowers financial costs for member states and reinforces compliance" could be created.
The former Belgian prime minister said that plans for eurobonds "effectively eliminate moral hazard and create a bond market which can compete with the US".
He said that moves in this direction would also "prepare the ground to establish the euro as a global reserve currency of the future".
ALDE group coordinator for economic affairs Sylvie Goulard said that the issue must be tackled in the European parliament, but warned that it is "not as simple as some people think".
"Eurobonds are neither good nor bad in principle and we must look carefully at the technical aspects," she said.
Goulard also said that the EU should not only be focused on internal matters and that the "euro must contribute to global stability".
Olli Rehn, EU economics and monetary affairs commissioner, said that any talk of eurobonds must go "hand in hand with increased fiscal surveillance".
Rehn stressed that "despite systemic shortcomings, [the euro] remains the prime political project and source of economic stability in the EU".
However, he added that this year must mark a "turning point" for European financial governance.
"The time has come for a new and deeper understanding of interdependence and accountability within an economic and monetary union," he said.
"The time has come for a new and deeper approach to economic integration.
"The basic principle is clear. Any step in the further sharing of risk would have to be balanced by provisions that ensure sustainable public finances and minimise the moral hazard."
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