Juncker, Tremonti want E-bonds; Schaeuble differs

Luxembourg's Prime Minister Jean-Claude Juncker and Italian Finance Minister Giulio Tremonti called for the issue of joint European sovereign bonds – or "E-bonds" – to assert the "irreversibility of the euro".
The pair, in a column published in Monday's Financial Times, said the creation of a European Debt Agency that could issue such bonds would be possible as early as this month.
"The European Council could move as early as this month to create such an agency, with a mandate gradually to reach an amount of outstanding paper equivalent to 40% of the gross domestic product of the European Union and of each member state," they wrote.
By formulating a strong and systemic response to the euro zone debt crisis, Europe would send a clear message to global markets and European citizens of its political commitment to economic and monetary union, the writers said.
The market for such bonds could become the most important in Europe and reach a liquidity comparable to that of U.S. Treasuries, they said.
However, the plan could meet resistance from countries such as Germany, who want to ensure governments are kept under pressure from bond markets, to avoid a repeat of the years of easy borrowing that led to Europe's debt crisis.
In a video interview published on the FT's website, German Finance Minister Wolfgang Schaeuble said jointly guaranteed bonds were not the solution because it would require "fundamental changes" in European treaties.
"As long as we have national competence for fiscal policy, we cannot give up the instrument for incentives and sanctions for the member states of Europe (to ensure) discipline in their national budget policies. Otherwise, the euro would fail."