The head of one of Germany’s largest lenders has been rebuked by the German finance ministry over his call for eurozone member states to start issuing common bonds.
Martin Blessing, chairman and chief executive of Commerzbank, wrote in Handelsblatt, a German business newspaper, that the creation of common bonds would boost the single currency’s standing in global finance, report the FT’s Claire Jones in Frankfurt and Stefan Wagstyl in Berlin.
The German finance ministry was quick to reject Mr Blessing’s proposal, and tell him to focus on running Commerzbank, which is 17 per cent state-owned.
Steffen Kampeter, deputy finance minister, said: “Eurobonds are far, far off the political agenda. And for good reason.”
Mr Blessing’s views directly oppose the position of Angela Merkel, Germany’s chancellor, who at the height of the euro area’s economic and financial crisis repeatedly rejected calls for eurobonds and argued that their introduction would ease pressure on weaker economies to revamp their economies.
Mr Kampeter echoed Ms Merkel’s stance on Wednesday, saying common liability would not help solve the problems of the eurozone because they would “reduce the incentives for member states to implement reforms”.
He added: “Instead of occupying himself with this subject at the wrong time, Mr Blessing should have concentrated on his role as chief executive.”
The Commerzbank chief argued in the article that the European Central Bank’s response to the crisis, which has involved buying government debt, and the bonds issued under the European Stability Mechanism bailout vehicle meant sharing debt burdens was “already a reality.”
Mr Blessing, who has chaired the board of Germany’s second largest bank since 2008, said on Wednesday that eurobonds “would permanently establish the euro as a globally important currency, ensuring the sustained importance and competitiveness of Europe.”
The ECB is set to vote on monetary policy tomorrow, with some analysts expecting its president Mario Draghi to signal that the rate-setting governing council has moved closer to embarking on a programme of mass government bond buying, known as quantitative easing.
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