Single bond agency warning

A proposal to create a single European agency for issuing eurode-nominated government bonds was greeted with scepticism yesterday amid warnings that it could require the reopening of the Maastricht Treaty.

The proposal, made twice in recent days by Mr Yves-Thibault de Silguy, the EU's outgoing monetary affairs commissioner, would see one agency take over from the 11 members as the issuer of public debt, similar to the role played by the US Treasury. Mr de Silguy's idea reflects his belief that the euro's reserve currency status is hindered by a lack of co-ordination in the way euro-zone governments now issue debt.

But the proposal would require an amendment to the Maastricht Treaty to incorporate the principle of member-states' underwriting each other's public debt issues and picking up the bill if they default.