PARIS, Dec 31 (Reuters) - Europe should consider how it can improve management of its debt sales, in particular by creating a central agency responsible for joint bond issues, the chairman of the Eurogroup Jean-Claude Juncker told a French newspaper.
"We have to think about a better way of jointly managing our public debt," Juncker told the Liberation daily in an interview in its Wednesday edition. "You could even imagine, for example, creating a European agency capable of issuing 'euro-bonds'."
The financial market crisis has revived long-standing speculation about a single agency for euro-zone debt to rival the market for U.S. Treasuries and help make it easier for smaller European governments to raise funds.
Spreads on euro zone bonds have widened sharply as member countries have sought to contain the effects of bailing out the banking sector and coping with the impact of an abrupt slowdown in economic growth.
Yields on debt issued by states like Italy, Greece and Portugal have spiked dramatically, raising those countries' borrowing costs as investors have moved into German government bonds which are seen as safer and more liquid.
"It is true that in such a situation, Germany would lose the advantage it enjoys today, with markets showing more confidence in it than in other euro-zone countries," Juncker said.
"But according to our estimates, this would not necessarily be the case after two or three years."
With the market for Treasuries booming this year, despite the deep problems facing the U.S. economy, Juncker also pointed to the greater appeal of American capital market instruments. "It's incredible to see that a country with an abysmal twin deficit and which is in deep recession, continues to draw in capital from all over the planet in this way," he said.
"I think that if Europe isn't managing the same thing, it's because it does not have the same efficient instruments as the United States does," he said. (Writing by James Mackenzie; Editing by Victoria Main)