Berlin Denies Rumors of Plans for Joint 'Elite Bond'

Berlin Denies Rumors of Plans for Joint 'Elite Bond'

The move would divide Europe -- according to a press report, Germany and the five other strongest euro member nations are considering the issue of so-called "elite bonds." A German government official has denied the report, but there is mounting speculation that the six nations plan to spearhead closer fiscal coordination.

German Chancellor Angela Merkel has been vehemently opposing calls for the introduction of joint bonds issued by all euro-zone member states to fight the ongoing currency union debt crisis. But according to a Monday report in the conservative paper Die Welt, her government has been secretyl working on an alternative: the issue of so-called "elite bonds" by the six euro-zone member states that enjoy a top, AAA credit rating.

The newspaper, citing unnamed senior European Union diplomats, said Germany was considering jointly issuing bonds with France, Finland, the Netherlands, Luxembourg and Austria, and that the bonds would have yields of around 2 to 2.5 percent, slightly higher than the current yield on 10-year German government debt. The idea has been under discussion for several weeks, and was addressed most recently last Friday in Berlin at a meeting of the finance ministers of Germany, Finland and the Netherlands, the newspaper said. Read More