Daube said the 'Deutschland bonds' would likely have medium to longer-term maturities, and no specific volume had been fixed although would-be participants' expectations were similar. Sources said in November a first issue would likely be over 10 billion euros.
The plan echoes a Europe-wide proposal for common euro bonds, championed by some governments but resisted by Germany, as a new way of tackling the euro zone debt crisis. But Berlin says the idea behind Deutschland bonds is different because it will not provide guarantees to the participating states, or Laender, and will only assume liability for an amount similar to that borne by each of them. Lower Saxony is one of three states so far, along with wealthy Bavaria and Baden-Wuerttemberg, to say it is not interested in joining the initiative.
But some smaller states have been calling for some time for the bonds in the hope of being able to refinance themselves more cheaply than at present. "Individual states have different views on whether or not this bond will lead to advantages in borrowing," Daube said. While the federal government has seen its debt yields fall to record lows during the euro zone crisis, several of Germany's state governments pay much higher rates, reflecting high levels of indebtedness or economic worries. The debt agency said Germany planned to trim its overall federal issuance next year to 250 billion euros from the 255 bln issued in 2012.