Brussels - AFP
Eurobonds could quickly ease the debt crisis and reinforce resistance in the eurozone to another crisis, says a European Commission green paper to be published Wednesday. The document, seen by AFP, proposes three options to help deal with the crisis -- all of the involving eurobonds as a solution. Two of the proposals would require changes to the EU\'s Lisbon Treaty. The eagerly awaited text presents eurobonds as the most radical solution but also \"the most effective\". Eurobonds are issued in a currency other than the one of the market in which they are issued, are attractive to investors and easy to trade. The Brussels paper proposes replacing current national debt payments with eurobonds -- essentially sharing the debt between the 17 eurozone nations and allowing them to benefit from common guarantees. A second option envisages keeping the same guarantees but only allowing eurobonds to cover part of a nation\'s debt, meaning states would have to keep up their national payments. This option could lead \"heavily indebted and vulnerable states\" to default on payment, according to the paper. Both options would mean changing article 125 of the Lisbon Treaty, which stipulates that EU member states must be responsible for their own debts. The Commission also proposes a third option -- creating eurobonds that would finance only part of a country\'s total debt and obliging each state to give guarantees proportionate to the amount of eurobonds issued. States subjected to high interest rates would \"do much worse\" from this third scenario, admits the Commission, which nevertheless points out option three as the easiest and quickiest to apply. In any case, sharing the debt \"must not lead to reduced budgetary discipline\" from certain countries, warns Brussels. Eurobonds have been floated several times as a possible solution to a debt crisis which has already engulfed much of western Europe -- resulting in bailouts for Greece, Portugal and Ireland. European Commission president Jose Manuel Barroso said last week they would be \"considered natural when we achieve our objective of reinforced governance and discipline and convergence in the eurozone\". But the Europe\'s largest economy, Germany, remains divided over the issue. While Chancellor Angela Merkel is a staunch opponent of eurobonds, the country\'s social democrat opposition is in favour.