Former Belgian Prime Minister Guy Verhofstadt urged a European approach to recapitalizing banks and the creation of a common bond market for the euro region.
“We obviously need a European approach” to the banking industry, Verhofstadt said today in a Bloomberg Television interview. Policy makers should “create the same rules and the same environment for all banks in Europe, smaller and bigger banks. That is necessary to create confidence between the financial institutions in Europe,” he said.
Verhofstadt also supported the idea of common bond issuance by the 17 countries that use the euro.
“The only stable solution for this euro crisis is the creation of what I call a euro-bond market,” he said. Proposals for insuring the bonds of distressed euro-area governments would be “certainly a step toward” a common bond market, Verhofstadt said.
From there, “it’s only a little step to go to a real euro- bond market, in which you mutualize the debt of the different members of the euro zone,” Verhofstadt said. “The idea of a euro-bond market is not to mutualize the whole debt of the euro zone, but only a part of it -- the 60 percent that is allowed under the rules of the treaty of Maastricht.”
To contact the reporter on this story: Maryam Nemazee in London at email@example.com
To contact the editor responsible for this story: Jones Hayden at firstname.lastname@example.org