BERLIN German news magazine Der Spiegel reported on Saturday that leaders of European institutions are working on a comprehensive plan to rescue the euro that would include the issuance of joint euro bonds - a move Germany has repeatedly rejected.
The news magazine said European Union Commission President Jose Manuel Barroso, European Council President Herman Van Rompuy, Euro group head Jean-Claude Juncker and European Central Bank President Mario Draghi are working on plans for a "genuine fiscal union" in which individual member states would no longer be able to independently take on new borrowing.
Governments would only be able to decide how to spend money that is covered through their revenues, Der Spiegel reported. Any country that needs more money than it takes in would have to report that need to the group of euro finance ministers.
The magazine quoted four high-ranking EU planners saying this group of finance ministers would then decide which financial desires at which levels were justified and would then issue joint euro bonds to finance these new borrowing needs.
"The exclusive group of ministers would be led by a full-time chair, who could ultimately rise to the position of European finance minister," the magazine wrote.
The weekly added that this "powerful group of finance ministers" would be controlled by a new European body in which representatives of national parliaments would have seats.
Der Spiegel noted that the model would in effect be headed towards collective liability that the German government has until now repeatedly rejected.
The reported added that the new collective debt issuance would only apply to new borrowing while existing loans would have to be covered by the individual member states.
(Reporting By Erik Kirschbaum)