World Economy

Future euro zone bailouts? Do it yourself, says Bundesbank

Euro zone countries on the verge of a default should draw on the private wealth of their citizens instead of asking others for help, according to a new report by Germany's Bundesbank.

PEDRO NUNES | AFP | Getty Images

In their monthly report, released on Monday, the central bank detail a future template for bailouts which tries to avoid the previous model used for countries like Greece, Portugal and Ireland.

(Read more: 'Sense of achievement' as Ireland leaves bailout)

A one-off capital levy - a tax on people's private wealth instead of their income - should be the first solution if a country runs into trouble, the Bundesbank suggested in the report.

"It is key that a country in crisis exhausts its own possibilities to regain the trust in the sustainability of its public finances," it said.

"Rescue programs financed by other member states' taxpayers should only exceptionally be called into action as a last resort, when the financial stability of the euro zone is in significant danger," the Bundesbank said.

(Read more: Greece to exit bailout plan in 2014: Prime Minister)

Since the beginning of the euro zone debt crisis in 2010, many commentators and politicians from the northern members of the 18-country group have complained that northern European taxpayers have bailed out their more reckless southern neighbors.

Billions of euros have been used to prop up struggling countries with Greece securing two international bailouts since mid-2010, totaling about $330 billion.

One study, by German insurance giant Allianz, has calculated that Berlin has saved 10.2 billion euros in 2010-2012 because of lower borrowing costs, as yields on its 10-year bonds fell from 3.39 percent to 1.18 percent now.

(Read more: Portugal 'confident' on May bailout exit)

All the while, the Berlin government has insisted on harsh austerity measures as a way for stricken countries to right their economies and signaled their unwillingness to let the European Central Bank engage in quantitative easing, which would potentially stoke inflation in its own nation.

The Bundesbank report looks to renew a debate in the country and whether German taxpayers should be on the line with future euro zone bailouts. Nicholas Spiro, managing director of Spiro Sovereign Strategy told CNBC via phone that this proves that there is no support in the euro zone whatsoever for any large scale mutualization of debts.

"This is what you would expect from the Buba (Bundesbank). It's pretty much par for the course," he said. This signifies that future loans could be more of a bail-in than a bailout-in, as witnessed in Cyprus, and that this bail-in style model would be used for sovereigns as well as banks, he said.

By's Matt Clinch. Follow him on Twitter