German govt rejects joint domestic bond proposal
BERLIN—Germany's federal government is rejecting a state governor's call that it issue joint bonds with the country's states, which could benefit from lower borrowing costs.
The federal government and Germany's 16 state governments issue separate bonds, with the latter paying slightly more to borrow. Olaf Scholz, mayor of the city-state of Hamburg and a member of the opposition Social Democrats, on Thursday raised the possibility of joint so-called "Germany bonds."
Chancellor Angela Merkel's federal government has vehemently rejected calls for joint eurobonds in Europe's debt crisis, and was similarly unenthusiastic about jointly issued domestic bonds.
Merkel spokesman Steffen Seibert said Friday: "The federal government believes this doesn't make sense for economic and legal reasons."