France Presses For Euro Area Bonds As Crisis Salve
France's Francois Hollande will push a proposal for mutualising European debt at an informal summit of EU leaders in Brussels this week, increasing pressure on German Chancellor Angela Merkel to drop her opposition to the idea, Reuters reported. The new French president raised the idea of bonds jointly underwritten by all euro zone member states during G8 talks at the weekend and intends to raise it again when EU leaders meet on May 23, even if it goes against Merkel's wishes. The rapid deterioration in the euro zone debt crisis over the past month, with Greece's potential exit from the 17-country currency bloc no longer taboo, has brought the idea back to the forefront, with many economists and policymakers arguing it would be one of the best ways of restoring market confidence. "The euro bonds debate is back front and centre and Hollande will have support from other leaders if he raises it," one EU official said. "It's not something that's going to happen overnight - there's a lot that needs to fall into place first - but there is a desire for a plan of action toward euro bonds." In a letter to EU leaders, European Council President Herman Van Rompuy urged them not to have any "taboos" at Wednesday's summit which is intended to focus on specific steps to stimulate growth and create jobs across the bloc. Read more.