Edward Scicluna

Labour MEP welcomes move forward on Eurobonds

Labour MEP welcomes adoption of first form resolution on the feasibility of stability bonds by the European Parliament saying it was an important step toward budgetary discipline.

Labour MEP Edward Scicluna says well-designed stability bonds could improve liquidity in the bond market, but also bind in rules on budgetary discipline.

Labour MEP and Socialist and Democrat group spokesman on Eurobonds Edward Scicluna said that common Eurobonds were close to becoming a reality after the European Parliament adopted its first formal resolution on the feasibility of stability bonds.

“This resolution on stability bonds is one important plea for sanity to change the current defective Eurozone architecture.   It is an opportunity for the Eurozone to show it is not offering just knee-jerk solutions to the latest downgrade but clear-headed thinking. Well-designed Stability Bonds could improve liquidity in the bond market, but also bind in rules on budgetary discipline,” Scicluna said.

The resolution was intended as an answer to the Green Paper by the European Commission on the same subject, and will be followed by a detailed report by the Parliament’s Economic committee.

Scicluna had negotiated both the first inclusion of reference to stability bonds in the economic governance ‘six pack’ as well as the current report with Liberal MEP Sylvie Goulard.

“We know that stability bonds jointly issued by member states will not be introduced in a matter of weeks or months. Not only do we need to decisively address the questions of conditionality and moral hazard, but also the legal requirements including possibly a treaty change. This resolution is about issuing a credible statement of intent to the financial world and to set in motion a chain of legal events to bring about the needed changes,” Scicluna said.

 

– maltatoday, 16 February, 2012

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