According to Deputy Polish Prime Minister Grzegorz Schetyna on Polish Radio this morning the talk of issuing Euro bonds by some EU countries is “ unfortunately true.” What is more interesting is the explanation of the “unfortunately” part, since Schetyna claimed that he feared, in the face of the economy crisis, there was a real threat that the EU would turn against new members. He also said that such a situation would result in the creation of “a two speed Europe.”

“The richest countries within the EU are intending to release Euro bonds, which would prevent the countries outside of the Euro Zone from selling theirs,” he said.
According to News Poland.

The Czech prime minister, Mirek Topalanek, currently president of the European Union, also expressed similar sentiments in a meeting of European parliamentarians in Brussels. “I would warn against the [euro bonds] idea, against the issue of new bonds, because we are going to run into difficulty repaying government debt,” he said.

Basically I think that both these comments are based on a misunderstanding, since if EU bonds are to be issued (and, as I keep saying, they already have been to help Hungary and Latvia) to help Austria say, this would be precisely to try to prevent the Austrian banks ahving to retreat from lending in the East, as I will explain in a post which is coming behind this one.

But the heart of the solution here is to overcome the East-West divide altogether, and open euro membership to the East as part of a comprehensive resolution of our collective difficulties.