You would think Junker would have enough on his plate trying to implement his Eurobond idea but no.
The next step Junker’s agenda is to implement Eurocredit. Operating on the same priniciple as Eurobonds but for use by the public for personal borrowing.
This is how it would work. A new Eurocredit fund would be created which would be financed by European taxpayers inside the Eurozone.
Private citizens of Europe would then be allowed to take out private loans with the loan being guaranteed by other taxpayers in the Eurozone through the Eurocredit fund.
Junker stated that the increasing cost of private loans and the banks reluctance to make consumer loans is stifling the EU economy.
Reuters quotes Junker as saying “To reinvigorate the European economy we need to boost consumer spending, by reducing the borrowing costs of private individuals we think we can stimulate consumption in all Eurozone countries”
Junker continued “there are a lot of people feeling pain in the Eurozone at the moment, especially in countries like Greece and Spain. Many people have seen their credit scores decimated due to job losses. The Eurocredit plan would enable these people to borrow at rates similar to those people whose credit ratings have been unaffected by the downturn in Europe, this can only be positive for the Eurozone”
When Junker was asked if he foresees Eurocredit being implemented before or after Eurobonds he stated that the Eurobonds idea was much further down the road, Eurocredit was still a new idea but the implementation of Eurobonds will give the EU and EU banks more experience of the idea meaning the implementation of Eurocredit could be much faster.
When Junker was pressed on a date for the implementation of Eurocredit he was slightly evasive but did give an indication that then end of 2013 was not out of the question.
An anonymous source from the Soldman Gachs said the idea was extremely interesting and that the potential growth opportunities for the European economy were huge if politician’s illogical resistance to the idea of shared risk could be reversed.
MoneyalaDosh, a leading Spanish charity assisting people with their debt problems welcomed the idea of Eurocredit. A spokesman said that many people who have been declared bankrupt or have lost their homes have been unfairly pushed out of the credit market. Whereas before it was easy for them to borrow money to buy their home or new car, now banks were not interested.
If people emerging from bankruptcy or on the brink of bankruptcy could be given a new avenue of credit, backed up by other taxpayers in Europe there is a real light at the end of the tunnel for many people living on the edge.
The spokesman continued “financial difficulties can be very stressful, if the Eurocredit scheme can give people in difficulties access to credit at low-interest rates, we see no reason why economies in Europe cannot receive a massive boost through increased consumer spending”.
Germany and Merkel, were unsurprisingly resistant to the idea of consumers being forced to bear responsibility for the personal borrowing of their neighbours and of Europeans in other countries.