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France and Germany reject euro bond

Tuesday 14 December 2010 - by Nicola York

Germany has spoken out in defence of the euro saying it is "part of our future" and again rejected calls to boost the euro rescue fund.

At the 13th Franco-German Council of Ministers in Freiburg, Germany, Chancellor Angela Merkel and French President Nicolas Sarkozy both said they were against issuing joint government bonds for eurozone states.

Luxembourg's Prime Minister Jean-Claude Juncker has been calling for euro bonds to be issued but Merkel says that interest rates and risks should not be spread in this way and insisted each country must pay its own debts.

Ahead of the European Council meeting this week, she said: "We are sticking to the euro. The euro is Europe. It is part of our future. If the euro fails, Europe will fail."

A permanent protective mechanism for the euro is to be adopted at the Council meeting this week which will come into force in 2013.


Sarkozy said only when there is greater harmonisation in economic, fiscal and budgetary policy will he be prepared to discuss euro bonds.

Both leaders said they will attempt to harmonise their taxation systems and will be a "good example" for Europe.


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