Greek Central Bank Chief Yannis Stournaras Launches Campaign to Win Berlin Over on Eurobonds

Bank of Greece Governor Yannis Stournaras argues for Eurobonds to fund defense and innovation, facing opposition from German Chancellor Friedrich Merz in 2026.

By: AXL Media

Published: Feb 19, 2026, 11:00 AM EST

Source: Information for this report was sourced from Politico

The Emerging ECB Consensus on Common European Debt

The push for eurobonds has gained unprecedented momentum within the halls of the European Central Bank. Stournaras noted that the Governing Council recently ended a fifteen year internal debate by formally calling for a highly liquid, region wide benchmark safe asset. This shift is particularly notable because it now includes the support of the German Bundesbank and the Dutch central bank, institutions that were historically the most vocal critics of shared borrowing. The informal summit held earlier this month signaled a unified front among central bankers, who now view common debt not as a southern European bail out mechanism, but as a technical necessity for a functioning monetary union.

A Changing Regulatory Sentiment Within the ECB

The regulatory landscape has evolved as the economic performance of southern European nations has stabilized. A decade ago, the interest rate spreads between German bonds and those of Greece or Italy were vast, fueling fears that common debt would simply be a subsidy from the north to the south. Today, those spreads have narrowed to less than one percentage point. This convergence has allowed regulators to focus on the broader competitive dynamics of the Eurozone. The Bundesbank’s shift in position reflects a pragmatic realization that without a unified fiscal tool, the European Union cannot effectively implement the regulations required for a successful green transition or maintain a competitive edge against the heavily subsidized industries of China and North America.

Strategic Rationale and Global Market Positioning

From a strategic standpoint, the absence of a common safe asset is cited as a primary reason for the persistent flow of European capital toward foreign markets. Stournaras pointed out that most of Europe’s current account surplus is currently invested abroad because international wealth managers lack a sufficiently deep and liquid euro denominated asset to park their funds. By creating eurobonds, the European Union would provide a credible alternative to the US dollar as a global reserve currency. This would not only lower the long term borrowing costs for European governments and corporations but also enhance the region’s strategic sovereignty by reducing its dependence on the fluctuations of the American financial system.