LONDON, June 19 (Reuters) - A common European sovereign bond would make sense if it goes hand in hand with fiscal integration across the euro bloc, Italy’s debt management chief, Davide Iacovoni, said on Wednesday.
Disintegration forces across Europe should provide renewed impetus on the project of a common bond, Iacovoni said, referring to joint debt issuance via common euro zone bonds.
But he does not expect this to happen very soon.
“On the new asset we need to be very careful if we don’t have a common fiscal capacity,” he said. “I don’t think we are very near in terms of the process but I am optimistic,” he added.
By pooling the bloc’s risks such common bonds would offer investors safer securities than those from most individual nations, analysts say. But richer countries have opposed the measure, fearing they will end up footing the bill.
Speaking of Italy’s high debt levels, Iacovoni said it had stabilised and that the question now was about how to reduce it.
“We have achieved a stabilisation of debt to GDP after several years of increase, of course we are struggling to bring it down,” he said, adding that the government is trying to put in place measurese to reduce it and to relaunch growth.
Iacovoni added that he was not very concerned about volatility of Italian government bonds because Italy has a very large set of investors and a primary dealership model that supports the secondary market. (Reporting by Virginia Furness and Abhinav Ramnarayan; editing by Sujata Rao)