Spanish Prime Minister Mariano Rajoy said he believed the eurozone could introduce eurobonds within a few years, in an interview published Sunday in a German newspaper.
Rajoy told Bild am Sonntag that steps toward pooling eurozone countries' debt -- a bid to keep borrowing costs down for the most vulnerable members -- could start as early as next year.
"The fiscal union should be realised in three steps," he said, in remarks published in German.
"First, member states should take measures to fulfil the tax and economic convergence criteria as well as the conditions imposed by the European Council." Rajoy suggested a timeframe of 2013-2014 for this initial phase.
Second, he said, in 2015-2016, "a European fiscal authority to monitor national budgets must be created. It would also make recommendations on the goals and the direction for fiscal policy in the eurozone.
"In this stage, medium- and long-term eurobonds could be issued, if the bulk of the debt burden is still carried on the national level," he said.
"In a third step, in which binding budgetary targets are approved for the entire euro area, shared (European) Union bonds could be issued," he said, suggesting 2017-2018 for their roll-out.
"That is my proposal, others may see it differently," Rajoy said. "What is key is that we manage to define a goal and the conditions required to achieve it."
He said that the status quo in which some European countries paid "unsustainably high rates" to borrow money while others enjoyed negative rates could not last.
"The current situation cannot be sustained over a longer period of time," he said. "That is why we must solve the problem of divergent yields now."
Rajoy is to hold talks in Madrid on Thursday with German Chancellor Angela Merkel.
She has repeatedly expressed her opposition to eurobonds as they would drive up Berlin's ultra-low borrowing costs and remove a strong incentive for budgetary discipline among euro member states.
Rajoy said he was looking to her to spearhead efforts to reform the currency zone.
"As German chancellor she plays a leading role in solving the urgent problems of the euro and of European integration," he said. "I have the impression she is prepared to do that."
Eurobonds are seen by many -- including France and the European Commission -- as a viable way out of the crisis, but Berlin believes they would only be acceptable after a long process of closer fiscal integration in the eurozone.