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July 27, 2011 at 05:57 AM
Greece’s Prime Minister George Papandreou said that the bond repurchase measure in the country’s second bailout amounted to a joint euro zone bond in what he called a move beyond a monetary union for the group of 17 nations sharing a single currency. Germany, however, said Berlin was opposed to such an approach as a broad measure.
Reuters reported that Papandreou, speaking on Wednesday to party lawmakers, made the characterization about the low-interest loans that are to be extended to his country. While Papandreou has supported the idea of jointly issued euro zone bonds, opposition to the notion has been fierce among other euro zone nations such as Germany. However, the Greek leader said that in agreeing to extend cheap loans to Athens, the euro zone had taken one step closer to making such bonds a reality.
He was quoted in the report saying, “The decision of our European partners to lend us at 3.5%, an interest rate just above the one at which Germany itself is borrowing, is in essence tantamount to introducing a European bond, regardless of the fact that this system has not been completed yet.”
Papandreou praised the move, adding that, while Europe was not rushing to make decisions on the debt crisis, it was also moving toward a more united front. He said in the report, “Europe is becoming more political, stronger. It is moving beyond the stage of being just a simple monetary union.”
