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UPDATE 1-German minister rejects euro bonds - "It's a phantom debate"

* Altmaier: Berlin committed to prevent renewed debt crisis

* Italy had called for jointly issued “coronavirus bonds” (Adds Altmaier quotes, background)

BERLIN, March 23 (Reuters) - German Economy Minister Peter Altmaier has dismissed calls by Italy and other European countries to introduce jointly issued debt, also known as euro bonds, as a way to finance measures to counter the economic impact of the coronavirus pandemic.

“The debate about euro bonds is a phantom debate,” Altmaier, a close ally of Chancellor Angela Merkel, told business daily Handelsblatt in an interview to be published in the Tuesday edition.

Italian Prime Minister Giuseppe Conte has called for special “coronavirus bonds”, or a European guarantee fund, to help EU states finance health spending and economic rescue programmes. Italy has lost more lives in the pandemic than any other country, including China where it began.

Ursula von der Leyen, another confidante of Merkel and head of the European Commission, the European Union’s executive, said on Friday that Brussels was ready to consider backing common debt issuance in the euro zone to help the bloc weather the massive impact of the coronavirus outbreak.

Germany, the bloc’s biggest economy, resisted common euro zone debt issuance at the height of the bloc’s sovereign debt crisis that pushed the shared currency to the brink of collapse.

Asked about Conte’s bonds proposal, Merkel last week said that euro zone finance ministers were discussing measures to support their economies but no conclusions had been reached.

Altmaier echoed Merkel’s statement, adding that it was now up to Finance Minister Olaf Scholz to look into how best to support other European countries struggling with the pandemic.

“We are all committed to preventing a renewed sovereign debt crisis in Europe wherever possible,” Altmaier said. “We are discussing with which instruments this can be done.”

Altmaier pointed to the European Central Bank’s already agreed package of measures to help the euro zone as well as Berlin’s efforts to shield Europe’s largest economy from the impact of the virus, adding that both steps together were sending a “strong signal for the stability of the euro”.

The ECB has agreed to a range of stimulus measures including ultra-cheap loans to banks and asset purchases worth 1.1 trillion euros this year with the goal of keeping low borrowing costs for firms and governments.

Germany has agreed a package worth up to 750 billion euros ($808 billion) to mitigate the damage of the coronavirus outbreak on the economy, with Berlin aiming to take on new debt for the first time since 2013.

Reporting by Michael Nienaber, Editing by Ludwig Burger

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