TALLINN - Estonian Prime Minister Andrus Ansip stated that Estonia does not support creating new eurobonds as there is no logic in awarding countries that fail to keep their finances in line with lower interest rates, reports National Broadcasting.
“We see very high moral risks involved in the eurobonds,” said Ansip at a government press conference on Sept. 15.
According to him, it would be difficult to explain why should countries that have kept their financial affairs in order, such as Germany and Finland – and can thus borrow funds from financial markets at cheaper prices – sacrifice anything for the countries where financial matters are not in order.
He added that if all eurozone countries would be made dependent on one single interest rate, some countries would see the interest rate increase from the current level while others would see theirs fall. “We instinctively presume that in the case of Estonia, that would mean a deterioration in the situation,” explained Ansip, though he emphasized that this is merely a theoretic possibility, as in practice Estonia borrows very little money from the global financial markets.
The Estonian PM estimated that the only solution to the European debt crisis could be found in cutting costs, executing structural reforms and increasing tax revenue.