The head of Germany's central bank on Wednesday
rejected a watered-down European Union proposal for common eurozone
bonds, saying such move would not restore confidence in the
Jens Weidmann, who is also a governing council member at the European Central Bank (ECB), spoke out in a magazine interview just two days before a summit in Rome of the eurozone's four largest economies.
"The euro-bills being described in the media seem to be the next attempt after the eurobonds to pursue a comprehensive mutualization of risk without embedding such a fundamental decision in a consistent currency-union framework or it being compatible with the current legal framework," he told the business weekly Manager Magazin.
"In my view, such a strategy is no help in overcoming the crisis of confidence," said the Bundesbank president.
German news magazine Der Spiegel reported at the start of the week that Brussels officials were proposing joint "bills" with short maturities and limited volume which each country could issue.
Germany has resisted demands from France and other nations for joint issues that would relieve Italy and Spain from punitive interest rates. Chancellor Angela Merkel will on Friday hold talks in Rome with the leaders of Italy, France and Spain.
Asked if it was reasonable to expect the sovereign-debt crisis to spread to Italy, Weidmann responded: "Fear of possible contagion must not lead to Europe opening itself to blackmail. Otherwise we would be writing blank cheques ..."
"Besides, in terms of economic fundamentals like its budget deficit and current account balance, Italy is better off than the crisis countries."
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