Euro-securities will be explored: Rehn

(BRUSSELS) - The European Commission has agreed to examine possible legislation to create bonds issued directly at eurozone level, EU economy commissioner Olli Rehn told the European Parliament on Wednesday.

"You have got a commitment from the commission to do a study on euro-securities within six months of the entry into force of the legislation," he said, referring to new laws aimed at reinforcing cross-border eurozone economic governance.

Legislation intended to punish countries which fail to meet common EU macro-economic targets consistently will be voted on by the European Parliament on Thursday.

Lawmakers unhappy that governments have given themselves more scope to evade fines however may reject the legislation's current form in the hours before Thursday's start to a key EU summit.

Rehn said the commission will also commit itself "to review the intergovernmental nature of the European Stabilisation Mechanism by mid-2014," referring to the post-2013, 750-billion-euro permanent rescue fund being set up to deal with future debt bailout needs.

The worry for big, wealthy eurozone governments is that shared bonds would see highly rated borrowers such as Germany end up paying higher interest rates on such instruments to compensate for the fact that weaker states, posing a higher risk for investors, could also issue such debt paper.

An EU diplomat suggested Rehn was being deliberately cagey because the chances of such a study or review making it onto the statute books was slim given the opposition in Germany, Europe's powerhouse economy, and elsewhere.