World Bulletin / News Desk
Former German Finance Minister Peer Steinbrueck, a possible challenger to Chancellor Angela Merkel in next year's election, spoke out in favor of common debt issuance in the euro zone even though the Berlin government and most Germans oppose it.
Steinbrueck, popular with the middle-of-the-road voters his centre-left Social Democrats (SPD) hope to win back in the 2013 election, told the Sueddeutsche Zeitung newspaper's Saturday edition that he backed SPD chairman Sigmar Gabriel's recent call for common debt issuance and closer fiscal integration.
"The party chairman is right about that and the development will go in this direction," Steinbrueck said, adding the European Union will have to be able to intervene directly more strongly than before in the fiscal policies of struggling countries.
Steinbrueck, known for his blunt manner, criticized those leaders in Merkel's centre-right coalition who have dismissed the SPD's proposals for common debt issuance as "debt socialism".
"They're being featherbrained," Steinbrueck said, adding that the euro zone already had become a 'Haftungsgemeinschaft' (community of liabilities).
Italy, Spain and France have been urging for the introduction of common debt issuance, such as euro bonds, as a way to counter the crisis of confidence on financial markets that has sent borrowing costs in those countries soaring to unsustainable levels.
But Germany, which has seen its borrowing costs fall, has opposed any joint issuance of debt, with Merkel's ruling coalition arguing it would take pressure away from those countries to enact reforms to their economies and cut state spending.
Merkel's coalition, however, has had to rely on SPD support to win approval of euro zone bailout measures because of a growing number of rebels in her ranks. She also needs opposition support in the upper house of parliament, where her coalition no longer has a majority.
Steinbrueck took his time to endorse the proposal from Gabriel, who is popular among the SPD's left wing. But after it won support from SPD parliamentary floor leader Frank-Walter Steinmeier, a moderate and another potential challenger to Merkel, Steinbrueck finally gave his blessing.
It is an endorsement fraught with risk for Steinbrueck and the SPD, eager to return to government after falling out of power in the 2009 election, as opinion polls show an overwhelming majority of Germans are opposed to the issuance of euro zone bonds.
Steinbrueck said the euro zone crisis had led to giving the European Union two choices: either the national states give up more of their sovereignty to Europe or move towards a "re-nationalization".
"That would be a fatal way to go" for an export nation like Germany, Steinbrueck said.
Turkish economy minister says growth will 'most likely' surpass 7 percent in first quarter of 2018
Net profit at the Frankfurt-based group fell 79 percent year-on-year to 120 million euros ($146 million).
BIST 100 index falls by over 2 percent at close, going down some 2,600 points from previous close
Policy rate, also known as one-week repo rate, remains same at 8 percent; lending rate rises 0.75 percent points
BIST 100 increases 0.29 percent; US dollar/Turkish lira exchange rate stands at 4.0850
Local units operating in manufacturing industry work at 77.3 pct capacity in April, says Central Bank
Public sector net borrowing falls by 3.5 billion pounds in 2017-18 financial year, says Office of National Statistics
Indices for service, retail trade, construction sectors fall in current month compared with March: Official data
Data monitoring company IHS Markit also flagged a slight slowdown in France, where strikes were interrupting a resurgent boom on the back of government reforms.
Treasury reports central government debt stock in March rises around 15 pct year-on-year, reaching nearly $235 billion
Sales to foreigners amounted to 1,827, 15.8 pct rise year-on-year, according to official report
BIST 100 slips 0.15 percent; US dollar/Turkish lira exchange rate stands at 4.0460
BIST 100 rises 0.01 percent; US dollar/Turkish lira exchange rate drops to 4.0250
Fresh hopes that Donald Trump and North Korea's leader Kim Jong Un will hold a historic summit within months also provided some much-needed optimism.
The fund cautioned that investors and financial markets expect a steady approach to monetary tightening based on the belief inflation will remain relatively tame.