German Chancellor Angela Merkel shut the door to joint euro-areabonds as a means of lowering Spain's borrowing costs, saying theyare the “wrong way” to achieve the greater European integrationneeded to stem the debt crisis.

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

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

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