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Late Session Selling

--Acknowledges German Reticence To Issue
--EC Commissioner Says Debate Needed On Eurozone Budget
By Tara Oakes
     BRUSSELS (MNI) - The European Union can get a safe asset for debt issuance
without the need for controversial Eurobonds, European Commissioner for
Economics and Financial Affairs told the Brookings Institution Monday.
     "In the medium-to-long term, it will be necessary to establish a genuine
European safe asset. This safe asset would ultimately be a new instrument for
issuing common debt," Pierre Moscovici said in Washington.
     "We are not talking about Eurobonds, which would be a red line for some
such as Germany, but could be a vehicle for future issuance," he added.
     His comments acknowledge the reticence in the bloc's biggest economy, whose
upcoming elections are awaited with baited breath for a further push on
increased Economic and Monetary Union.
     Latest polling by INSA, released Monday, still had current Chancellor
Angela Merkel's CDU/CSU topping results at 36%.
     If Merkel's party are returned at the head of a coalition, it will also be
a stamp of approval for Wolfgang Schaeuble's term as finance minister by a
public who eye debt mutualisation with suspicion. The Greek debt crisis
solidified a reticence to burden German taxpayers, which has endured since.
     Left-wing parties who were vocally more sympathetic to the plight of Greece
lack the numbers to form a majority government. Her main rivals -- and current
coalition partners -- the centre-left SPD suffered a 1.5% dip from the last INSA
figures published and now stand at 22%. The Greens and the far left Linke have
both benefitted, now at 7% and 11% respectively.
     Far-right AfD match the Greens at 11% and Merkel's preferred coalition
partners, the FDP, are at 9%, according to INSA.
     Moscovici's speech did not flesh out plans for a preferred safe asset
option, but did indicate dissent among the ranks for EC President Juncker's
rejection of a Eurozone budget. 
     Instead, Juncker called for a "strong euro area budget line" within the
current bloc budget.
     "There can be other conceptions -- some could imagine that this could be
outside the EU budget, that it could have its own resources. So there will be a
debate there," Moscovici said.
     All eyes are on French President Emmanuel Macron's speech next week, where
he will lay out his own views for the future of the Eurozone in an attempt to
harness the renewed momentum Germany's elections will bring.
     "Whatever happens, you will have a strongly pro-European government in
Berlin," Moscovici said on the upcoming vote.
--MNI Brussels Bureau; +44 203-865-3851; email:
--MNI London Bureau; tel: +44 203-586-2225; email:
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MNI London Bureau | +44 203-865-3812 |