European leaders agree on €130bn package for growth

The leaders of Germany, France, Italy and Spain this afternoon agreed in principle to a €130bn (£104bn) package of measures aimed at reviving economic growth in the Eurozone.

But critics say the measures are largely symbolic and debate remains about the whether the nations will issue joint bonds to combat the debt crisis.

After a four-way summit in Rome the Italian Prime Minister Mario Monti said the European Union should adopt a series of growth measures worth about one per cent of the region’s gross domestic product next week’s summit.

“Growth can only have solid roots if there is fiscal discipline, but fiscal discipline can be maintained only if there is growth and job creation,” Monti said.

But the French, Italian and Spanish leaders appear to have made little progress in convincing Merkel that she should mutualise Europe’s debts.

French President Francois Hollande voiced impatience with Berlin’s reluctance, saying it should not take 10 years to create jointly underwritten eurobonds, adding that greater solidarity was needed among member states before they abandon more sovereignty to EU institutions.

“I consider euro bonds to be an option…but not in 10 years,” Hollande said in a direct challenge to Merkel. “There can be no transfer of sovereignty if there is not an improvement in solidarity.”

In contrast Merkel argues that members of the 17-nation currency union must transfer control over national budget and economic policies to Brussels before Germany would consider common debt issuance.