European officials are drafting a proposal to issue joint euro-area bonds for countries running a budget deficit if all of the region’s governments agree, Der Spiegel reported, without saying how it got the information.

European Commission President Jose Barroso, European Union President Herman van Rompuy, Luxembourg Prime Minister Jean- Claude Juncker and European Central Bank President Mario Draghi are working on the blueprint for a “real fiscal union,” the German magazine reported today.

Governments whose financing need exceeds revenue would have to apply to the group of euro-area finance ministers to allow extra spending, Der Spiegel said. If ministers decide the deficit spending is justified, they could approve joint euro bonds to finance the borrowing. A body of representatives of national parliaments would be set up to have oversight over the ministers, the report said.

While the financing option would apply only to new borrowing, not existing debt, it amounts to debt-sharing that the German government has rejected so far, Der Spiegel said.

[Bloomberg]