Eurobonds to be accompanied by surveillance and coordination: EU official

EU's Commissioner for Economic and Monetary Affairs Olli Rehn (R), President of Eurogroup, Prime Minister of Luxembourg Jean-Claude Juncker (C) and Polish Minister of Finance Jacek Rostowski attend a conference of European Parliament's Economics Committee discussing the sovereign debt markets in Brussels, capital of Belgium on August 29, 2011. (Xinhua/Thierry Monasse)

BRUSSELS, Aug. 29 (Xinhua) -- Eurobonds should be introduced with reinforced fiscal surveillance and policy coordination, European Union (EU) economic chief said here on Monday.

"It is clear that eurobonds, in whatever form they were to be introduced, would have to be accompanied with a substantially reinforced fiscal surveillance and policy coordination as an essential counterpart," European Commissioner for Economic and Monetary Affairs Olli Rehn told a European Parliament committee.

Rehn said that those measures were essential in "avoiding moral hazard and ensure sustainable public finances."

He confirmed the Commission would prepare technical issues for designing eurobond in short term, and carry out broad consultation so as to identify common ground and push it forward.

Another issue Rehn addressed in the speech was eurozone's financial consolidation and structural reforms.

"Structural reforms must be an integral part of our comprehensive crisis response," he said, "more effective structural measures with substantial impact on enhancing sustainable growth are urgently needed."

Rehn also called for eurozone state to implement the second round of Greek bailout, saying "it will be essential to swiftly implement the 21 July euro area summit decisions and adopt the pending governance package," echoing European Central Bank President Jean-Claude Trichet's pledge earlier in the day.

Rehn attributed financial markets turmoil this summer to "U.S. political discord on its debt ceiling and the EU sovereign debt problems, as well as more general concerns about an economic slowdown."

Meanwhile, he also warned of "continued financial turbulence spilling over to and potentially harming the recovery of the real economy."