Eurobonds (Green Paper)
The Commission presents three options for the implementation of Eurobonds and puts up for discussion the related pros and cons. With regard to the pros it mentions in particular the alleviation of the current debt crisis, the stabilisation of the banking system and the increased liquidity of the government bonds market. With regard to the cons it mentions the reduced incentives for budgetary discipline. For instance, Member States can run up debts at the expense of the budgetary discipline of other Member States, without this having an affect on their financing costs.
The Commission’s proposal to balance out the lowered incentives for budgetary discipline by a strengthened surveillance of national budgets is doomed to failure. The experience gained from the Stability and Growth Pact clearly demonstrates that market disciplining is indispensable. One of the proposed options to implement Eurobonds even infringes the German Bundestag’s budget responsibility, which is protected by the Basic Law’s guarantee of permanence of basic right.