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.”

“I fear that at the summit there will be much too much talk about mutual liability and far too little about improved oversight and structural measures,” Merkel told lower-house lawmakers in Berlin today. “Oversight and liability have to go hand in hand. There can only be joint liability when adequate oversight is ensured.”