Merkel: Euro-Bonds kurbeln Wachstum nicht an

Eurozone Crisis: If Greece Goes, Germany's Prosperity Goes With It
THE OBSERVER: If the eurozone were to shrink, Germany's once-captive markets would become too poor to import: and the rapid appreciation of a stronger euro would make its exports much pricier

Germany last week found itself able to borrow for two years at the astonishingly low rate of 0.07%. Very nice too: but surely the real message Angela Merkel and her colleagues must take from the successful auction of those zero-coupon schatz bunds is that the single currency simply isn't working.

All the money wants to flow in one direction: towards Germany. It is only the efforts of the European Central Bank, as a giant recycler of liquidity to dry areas of the eurozone banking system, that is ensuring a stability of sorts. This position can't be sustained.

You would be hard-pressed to identify any shift in sentiment in Germany, however. Eurozone politicians had dinner in Brussels on Wednesday and most came away hungry. Mariano Rajoy in Spain is screaming that his country can't afford to keep paying 6% to borrow over 10 years. François Hollande in France and Mario Monti in Italy want to see the introduction of eurobonds, a system of joint issuance of debts. But their prayers have so far gone unanswered, because Germany is not persuaded, even after the rest of the world's most powerful leaders, led by Barack Obama, ganged up on Merkel at last weekend's G8 summit at Camp David.

Her reluctance is, of course, understandable. First, Germany's interest costs would rise, perhaps by €50bn a year, if eurozone members were to borrow collectively, instead of as individual countries. And in the event of one country suffering a crisis, stronger governments – for which read Germany – would be on the hook. » | The Observer | Sunday, May 27, 2012

Summit on Eurozone Crisis Ends in Failure
The euro has fallen to its lowest level against the dollar in almost two years, following Wednesday's late night meeting in Brussels. The talks in Belgium were meant to come up with an agreement on how to tackle the eurozone crisis. But no deal has been reached, as Andrew Simmons reports.

EU Leaders Discuss Debt Crisis
The European Union summit has kicked off in Brussels with the focus expected to shift from austerity to growth plans. The summit comes amid concerns over Greece's eurozone future and Spains troubled banks. One idea is to have all eurozone debt guaranteed by all the nations, with Germany having to shoulder much of the burden. But, the German leader Angela Merkel has already dismissed that idea. Al Jazeera's Barnaby Phillips reports from Brussels.

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Eurozone Crisis: Germany and France Clash over Eurobonds at Summit

THE GUARDIAN: French president François Hollande marks his Brussels debut by challenging chancellor Angela Merkel over bailout

A major rift has opened up between Germany and France for the first time in 30 months of euro crisis over how to restore confidence in the single currency.

A special EU summit marking the debut of France's President François Hollande saw him challenge Germany's chancellor, Angela Merkel, on the euro, arguing that the pooling of eurozone debt liability – eurobonds– had to be retained as an option for saving the currency. Merkel has ruled out eurobonds as illegal under current EU law.

Hollande told the dinner of 27 leaders that he wanted to see eurobonds established, while conceding that this would take time, witnesses at the talks said.

Merkel responded that this was nigh-on impossible since it would require changes to the German constitution and around 10 separate legal changes, the sources said.

There was no policy breakthrough at the summit, rather a reiteration by leaders of known positions. Any decisions were postponed until the end of next month after French and Greek parliamentary elections on 17 June.

The fissure between Paris and Berlin widened further when Hollande also called earlier for the eurozone's new bailout vehicle to be allowed to draw funds from the European Central Bank and to be able to recapitalise banks directly, both proposals fiercely resisted by Berlin and also currently impossible under EU law.

Senior German government officials had insisted that eurobonds should not be even discussed at the summit. The Hollande team maintained that all topics were on the table and also held open the prospect that France could refuse to ratify Merkel's fiscal pact compelling debt and deficit reduction in the eurozone unless eurobonds were recognised as a possible tool. » | Ian Traynor in Brussels and Patrick Wintour | Thursday, May 24, 2012

Eurozone Crisis 'Threat' to Global Economy
The eurozone financial crisis could threaten the global economy, according to Organisation for Economic Development and Co-operation. The 17-nation eurozone will see its economies shrink by 0.1 per cent, before rebounding to 0.9 per cent next year, the Paris-based organisation said in its latest report released on Tuesday. Nick Spicer reports from Berlin.

Eurobond Plan Sets Barroso on Collision Course with Merkel

THE GUARDIAN: The German chancellor has already made clear she does not see eurobonds as a long-term solution to the eurozone crisis

The European commission faces stiff opposition from Germany on Wednesday when it unveils plans to tackle the spiralling sovereign debt crisis with bonds jointly issued by eurozone nations.

Commission president José Manuel Barroso is expected to argue strongly for stability bonds, also known as eurobonds, against a backdrop of soaring borrowing costs and shattered confidence around Europe.

He must then take his plan to French president Nicolas Sarkozy and German chancellor Angela Merkel, who has already made clear she does not see eurobonds as a solution worth considering at this stage in the crisis.

"If at all, this discussion belongs at the end so I don't find it particularly fitting that we are now once again conducting it in the middle of the crisis, as if it were the answer," Merkel said. "In the long term, it isn't." » | Katie Allen and Graeme Wearden | Tuesday, November 22, 2011

Moody's Cuts French Banks, Eurobond Talk Lifts Markets
REUTERS: Moody's cut the credit ratings of two French banks on Wednesday because of their exposure to Greece's debt, highlighting growing risks to Europe's financial sector from a deepening euro zone sovereign debt crisis.

But the euro and European stocks were lifted by an announcement by the head of the European Commission that it would soon present options for issuing a common euro zone bond, despite huge political hurdles especially in Germany.

The ratings agency's one-notch downgrade of Societe Generale and Credit Agricole came hours before the leaders of Greece, France and Germany were to hold a video conference on measures to head off a potential Greek default, which has prompted rising global alarm. » | Lionel Laurent and Luke Baker | PARIS/BRUSSELS | Wednesday, September 14, 2011

Merkel and Sarkozy Push Closer Eurozone Ties
The pressure was on for Angela Merkel and Nicolas Sarkozy to reassure the markets and shore up confidence in the single European currency.

Reassurance will come in the form of more regular meetings of eurozone leaders to monitor their economies, as well as a mechanism to stop countries from running up big deficits.

Al Jazeera's Jacky Rowland reports from Paris, France.

Debate Over Eurozone Bonds Rages
There is growing opinion across Europe that so-called Eurobonds are the bold step needed to tackle the financial crisis.

The principle behind a common government bond is that Eurozone countries would guarantee each other's debts.

Investors would see the bonds as safe and would loan money at low interest rates. The hope is that the lower borrowing costs would prevent any more financial bailouts.

But the eurobond has its critics.

Al Jazeera's Tim Friend reports.