Merkel Shuts Door to Euro Bonds

German chancellor calls joint euro-area bonds ‘wrong way’ to achieve greater integration.

German Chancellor Angela Merkel shut the door to joint euro-area bonds as a means of lowering Spain’s borrowing costs, saying they are the “wrong way” to achieve the greater European integration needed to stem the debt crisis.

Speaking three hours after Spanish Prime Minister Mariano Rajoy made a plea for a summit of European leaders to use all available tools to help Spain service its debt, Merkel said euro bonds, euro bills and debt redemption funds are unconstitutional in Germany and economically “wrong and counterproductive.”

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“The sovereign debt crisis shows us daily that deficiencies in one euro-zone country can cause difficulties in the entire euro zone,” Merkel told the lower house, or Bundestag. “It also shows us that national answers aren’t enough to secure the euro area’s stability.”

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