CONFUSION over the precise definition of Eurobonds issued in the future euro zone could be cleared up if proposals by the Centre for European Policy Studies are adopted. Traditional definitions of Eurobonds as bonds issued outside the country in whose currency they are denominated in have become blurred, says CEPS in its report entitled Capital Markets and Economic Monetary Union. This is because, theoretically all Emu area Eurobonds denominated in euros should be treated as domestic bonds. The redefinition of these bonds would eliminate some of the fuzziness over recent proposals to levy a 20% tax on Eurobonds. Currently Eurobond holders in Europe pay no tax because their identity is shielded through a Luxembourg registration.
July 03, 1998
