UPDATE 1-Juncker: Germany rejects e-bond without studying it

Published 12/08/2010, 06:00 AM
Updated 12/08/2010, 06:04 AM

* Juncker: Germany rejects e-bonds without knowing details

* Germany has non-European way of doing European business

(Adds further quote, background)

BERLIN, Dec 8 (Reuters) - Germany has rejected the idea of a common euro zone bond without studying the proposal in detail, Jean-Claude Juncker, the chairman of the eurogroup of countries was quoted as saying on Wednesday.

Juncker, who is also Prime Minister of Luxembourg, also said Germany had a non-European way of doing European business.

Earlier this week, Juncker and Italian Finance Minister Giulio Tremonti called for the issuance of joint European sovereign bonds -- or E-bonds -- to assert the "irreversibility of the euro".

But the plan came up against strong resistance from Germany, which wants 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.

"The proposal is being rejected before it has been studied," Juncker was quoted as saying in an interview with Die Zeit newspaper to be published on Thursday. "Germany's thinking is a bit simple on that."

Juncker said he had not proposed a single interest rate to bundle national debt on a European level but instead, a large part of the debt would be at national rates.

A meeting of the group of euro zone finance ministers on Monday ended with no fresh action to stem the currency bloc's debt crisis and Juncker saying that the issue of a common bond had not even been broached. (Reporting by Paul Carrel and Annika Breidthardt; editing by Patrick Graham)

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