Taking sides on eurobonds

Contention over the issue of eurobonds is potentially “explosive” reports Handelsblatt, which points out that proposals to introduce European treasuries as a remedy to the sovereign debt crisis have put Angela Merkel in a difficult position with regard to her European partners and her domestic political allies. On 22 August at a meeting of her CDU party, the chancellor explicitly ruled out the introduction of eurobonds, affirming that "they are not the right solution to the crisis in Europe".

In so doing, she aimed to put an end to a debate which has sparked controversy in German political circles and disagreement within the country’s ruling coalition. Members of the CDU are divided on the issue, while their partners in the FDP liberal party are staunchly opposed to eurobonds. Figures in a poll published by Handelsblatt show that the FDP’s position is shared by 75 per cent of Germany’s voters. However, the newspaper does not believe that Angela Merkel’s policy on the question will be wholly dictated by the people. Her attitude will likely be influenced by the fact that Germany “lacks European and in particular French allies” who support this position.