Germany to propose national funds for high debt

BERLIN (Reuters) - Germany would like European countries to set up special national funds for sovereign debt that is over 60 percent of gross domestic product to help build market confidence in the euro, Finance Minister Wolfgang Schaeuble said on Thursday.

He told reporters that Germany would make the proposal at a European Union summit next week.

"The funds should be supported by own (public) revenues and dismantled within 20 years," he said.

The proposal looks similar to an idea touted by the government's independent "wise men" advisors on Nov 9, only their idea was to set up a European Redemption Pact with common liability. It was rejected by Chancellor Angela Merkel who saw it creating constitutional problems.

But Schaeuble's funds would be national, which would get around German concerns about the "communitarization" of debt between European states.

(Reporting by Matthias Sobolewski, Writing by Sylvia Westall)