Germany restated its opposition today to a common euro zone bond as a solution to Europe's debt crisis, and said it saw no case for a regional summit until a clear rescue programme for Greece was on the table.
"We are against euro bonds," government spokesman Steffen Seibert said, reiterating concerns that a common bond for the single currency area would provide no meaningful incentives for national governments to pursue prudent budget policies.
There has been speculation German chancellor Angela Merkel will have to move beyond what critics view as her piecemeal approach to the euro zone debt crisis, and either accept a Greek debt restructuring or move towards greater fiscal integration in the common currency area.
With risk-wary investors signalling an unwelcome new phase in the crisis this week by training their sights on Italy, the country's economy minister Giulio Tremonti lobbied on Wednesday for euro zone bonds to cut borrowing costs for troubled member states.
On a tour of Africa yesterday, Dr Merkel said she wanted a quick solution to Greece's problems.
In a newspaper interview today, an external economic advisor to the German government, Beatrice Weder di Mauro, called for the European Financial Stability Facility to be allowed to buy Greek debt from investors in return for bonds it issued itself.
But in a regular news conference, German government spokesmen said that there was no current proposal that would justify scheduling a meeting of euro zone leaders.
"A meeting ... will take place when it is necessary and sensible. At the moment there is no date for such a meeting. There is not a race for setting this date. The key thing is a breakthrough in finding a programme for Greece," Mr Seibert said.
Some observers have said that setting a summit date would boost market confidence, as the delay in agreeing how to tackle Greece's crisis has increased investors' aversion to bonds from other highly indebted euro zone countries, including Italy.
The Italian government, unusually with opposition support, is rushing through a €48 billion austerity plan, and German finance ministry spokesman Martin Kotthaus said he thought that should help stem rising Italian debt costs.
"We're working on the assumption that the markets are going to accept it and welcome it," he said, echoing earlier support from German finance minister Wolfgang Schauble.
Mr Seibert added that Germany was confident agreement will be reached in budget deficit talks in the United States, a failure of which could temporarily put the world's largest economy in default, causing financial market turmoil.
"The German government is watching very closely what is being discussed," he said. "We are confident that ultimately there will be a compromise, we hope it will be soon."
Separately, a government source told reporters that the debt situation in the United States and the euro zone, as well as the euro, were all likely to be on the agenda of top-level talks between Germany and Russia early next week.
Reuters
