PARIS will host German chancellor Angela Merkel today, as she joins French president Nicolas Sarkozy in a bid to control the Eurozone’s growing debt crisis.
The controversial euro bonds plan – which would see debt pooled across the 17 members of the single currency – is believed to be off the agenda, with increasing opposition from Merkel’s own side of Germany’s political divide against the measure.
The Christian Democratic Party’s (CDU) Norbert Lammert warned yesterday that Merkel must not rush through ratification of the European Financial Stability Facility (EFSF), but instead allow a comprehensive debate.
Meanwhile members of the Free Democrats (FDP) -- the liberal-leaning party that typically backs up the CDU -- have threatened to desert the government if it tries to push a euro bond plan through parliament.
Yet two leading German business groups yesterday came out in support of the proposal.
The head of Germany’s leading export association was the first prominent figure to endorse euro area bonds.
“We must show the markets that we are ready to use the appropriate tools, and that means euro bonds signed off by Germany,” said BGA president Anton Boerner.