Three committees in the European Parliament are at work to provide their opinion on a European Commission Green Paper exploring the feasibility of eurobonds – or stability bonds, as the EU executive prefers to call them.
The Green Paper, tabled in November 2011, explored three options for eurobonds, ranging from a complete substitution of national debt issuance to a mix between a national and a European system.
Although the Parliament deliberations in the coming months will remain theoretical at this stage (Green Papers a merely an invitation for debate), it will give a good indication of where the main political parties stand on the matter.
The first body to deliver its opinion will be the legal affairs committee, which is expected to publish its position by the end of April.
“Full substitution of national issuance by stability bonds would represent the most suitable response to the sovereign debt crisis, although it still lacks key prerequisites in terms of economic, financial and political integration,” said Raffaele Baldassarre, a Christian Democrat MEP from Italy who is in charge of drafting an opinion for the Parliament's legal affairs committee.
Despite supporting eurobonds in principle, the influential legal affairs committee is set to reject the boldest option, which would involve substituting national bonds for European ones, on the grounds that it would require treaty changes. On the other hand, it will propose to go ahead with eurobonds using “a combination of approaches,” according to a document seen by EurActiv.
The committee for the internal market will follow suit and is expected to vote its own opinion by the beginning of May.
The last word will be offered to the committee on economic and monetary affairs. The deputy in charge of the dossier is the French Liberal Sylvie Goulard, who has been an early supporter of the introduction of eurobonds as a means to counter the eurozone's financial crisis.
“We are persuaded that eurobonds can play an essential role in fostering financial stability in Europe. They can as well be a key instrument to exit the current crisis,” she said in a recent statement.
Soon after the publication of the Green Paper on eurobonds, the European Parliament agreed a preliminary common text to react to the European Commission's long-awaited initiative.
MEPs led by Goulard and the influential chair of the economic committee, Sharon Bowles, a Liberal MEP from Britain, underlined that the Parliament “believes that the prospect of stability bonds can foster stability in the euro area in the medium term”.
The paper also presented a number of measures to be carried out to make the Commission options more feasible, including “effective market incentives to reduce debt levels”, “a system of differentiation of interest rates among member states with divergent ratings”, “budgetary discipline and an increase in competitiveness.”