Germany on Saturday rebuffed renewed calls that eurozone countries should issue joint euro-denominated bonds and have a joint finance minister, arguing that would only be possible if fiscal policy were collective already.
"As long as we don't collectivise financial policy we also cannot have a uniform interest rate level. The different rate levels are the incentive to run a solid economy or the punishment if you are not running it properly," Finance Minister Wolfgang Schaeuble, speaking at his ministry's open day.
"So the question is, how do we manage to promote political integration step by step. We cannot collectivise interest rates," Schaeuble said, referring to proposals that the euro currency bloc should issue common euro bonds. Germany has led resistance to calls that the euro currency bloc should issue common euro bonds and expand its bailout fund to calm repeated market selloffs of government bonds and bank shares of vulnerable debtor countries. Der Spiegel magazine reported finance ministry calculations that showed issuing joint euro bonds would cost Germany billions of euros each year.
However, Martin Blessing, Chief Executive of Germany's second-largest lender Commerzbank said a European finance minister with sway over member states' taxes and budget was needed to lead the euro zone out of its debt crisis. Berlin is also facing criticism over its own proposals to solve the eurozone crisis, which include a financial transaction tax that Chancellor Angela Merkel and French President Nicolas Sarkozy said this week they would propose to other eurozone members.
Schaeuble is to meet his French counterpart Francois Baroin in Paris on Tuesday to discuss the health of Europe's finances including remedies such as the tax. Andreas Schmitz, the head of the association of German banks (BdB), whose clients would be directly affected by the tax, said the tax would be inefficient and would not prevent financial crises as professional traders did not care where they traded and would simply avoid Europe. "The big tax income will fail to appear," he told Bild am Sonntag newspaper. Proponents of the tax expect it could raise 30 to 50 billion euros a year.