Chancellor Angela Merkel left the door open to a compromise on debt sharing in the euro area as Italian Prime Minister Mario Monti said he can help bring Germany round to acting in Europe’s “common good.”
Merkel’s veto on allowing Germany to underwrite joint debt issuance in the 17-nation euro region is under fire from her international partners as well as the domestic opposition. While she refused to back joint euro-area bonds at a Brussels summit on May 23, Germany’s opposition parties wrung a concession from the chancellor on her return to Berlin yesterday to reconsider a separate proposal on common liability for sovereign debt.
“Europe can have euro bonds soon,” Monti said in an interview on Italian television station La7 yesterday. Germany has an economic interest in ensuring no country leaves the euro, while Greece will probably remain in the currency region even as “anything can happen,” he said.
Merkel, who poured cold water on the redemption fund when it was unveiled last year, again doused joint debt liability in a speech yesterday, saying that the causes of the debt crisis “can’t be redressed with one big bang.”