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Vienna, 25 May 2012 Fekter against Eurobonds Fekter: "Eurobonds will not solve the basic debt problem; they will only relieve the symptoms.“

In some European countries, eurobonds are repeatedly introduced into discussions over the debt crisis. A whole range of models are debated – from joint unlimited issues to models where debts can be incurred via eurobonds up to a certain percentage of GDP, and the states themselves are responsible for any amount over and above that. Currently, the total debts of the Eurozone amount to c. EUR 7,600 billion.

Finance Minister Dr Maria Fekter does not however consider eurobonds to be the solution to the debt problem. "Debts are not reduced, but their servicing is 'socialized'. Only the symptoms are relieved." Moreover, the changeover to eurobonds would be a similarly complex and costly procedure as was the conversion to the euro in its day. "Many years of preparation would be necessary, and so a contribution towards resolution of the current crisis is entirely out of the question. What is more, for eurobonds, a change to the EU Treaty would be needed which would have to be ratified in 27 countries," added Fekter, reinforcing her stance. In addition to these criticisms, Fekter however also pointed out further risks over eurobonds: "Austria would have to accept liability for the debts of another country without having a right of veto in that country's national parliament when it comes to budget approval. As a result, eurobonds would require a uniform financial and economic policy, with far-reaching rights of intervention in areas of national competence." Furthermore, apart from the legal risks, Minister Fekter considers that eurobonds will potentially sow the seed of the next debt crisis or that, in future crises, they would trigger a contagion effect drawing in healthy countries. "The debt crisis was triggered through the market not making a sufficient distinction over interest rates for government debt as between high-risk and lower-risk debtors. This was the only way that high-risk countries could incur such high debts that the stability of the entire system was endangered. With eurobonds, precisely this system of a uniform, non-discriminatory interest rate would be re-introduced."

Although Fekter admits that eurobonds do indeed comprise a number of advantages, the disadvantages would by far prevail. "In addition to the criticisms already raised, it is entirely uncertain whether the desired effects could indeed be achieved. In any event, they can on no account make a contribution towards resolving the current crisis," concluded the Minister.