ANGELA Merkel yesterday warned there were no "quick and easy solutions" to the eurozone crisis as concerns continued to grow over the finances of Greece, Italy and Spain.
On the eve of today's EU summit in Brussels, the German Chancellor again made clear eurobonds – sharing total debt across the eurozone's 17 members – were economically wrong and counterproductive.
Warning that her country should not be overburdened, she told German MPs: "It is imperative we don't promise things we cannot deliver and we implement what we have agreed. Joint liability can only happen when sufficient controls are in place."
This will raise hopes in Paris and Rome that some form of debt sharing might be approved if central controls can be agreed. The UK Government, which has also argued for eurobonds, stressed how Mrs Merkel was talking about the "total" mutualisation of debt.
With Spanish Prime Minister Mariano Rajoy saying Spain could not afford to finance itself for long at current borrowing rates of around 7%, pressure is mounting on EU leaders to come up with a swift solution to ease the immediate financial crisis. Yet Germany continues to oppose pressure to use eurozone rescue funds to bring down Spain's and Italy's borrowing costs.
After last December's compact for fiscal integration, it is expected that, following pressure from Francois Hollande, the new French President, a compact for growth and jobs will be agreed in Brussels.
There will also be preliminary talks about the EU's budget for 2014/20.
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