Germany renewed its opposition to growing calls for a move towards bonds that are jointly issued by eurozone members yesterday, with German Chancellor Angela Merkel saying that so-called eurobonds were "exactly the wrong answer" to the currency union's sovereign debt crisis.
The rejection follows a fortnight of turmoil on the world markets, with investors increasingly anxious about what they see as the lack of political will to solve the eurozone debt crisis.
Last week also saw the Wall Street investment bank Morgan Stanley highlighting Europe's "slow and insufficient response to the sovereign crisis" as one of the reasons for a downgrade of its economic-growth forecasts.
But Ms Merkel rebuffed the clamour for eurobonds as a viable solution to the Continent's problems.
"They lead us to a debt union and not a stability union," she told German television yesterday. Instead, Ms Merkel said Europe needed to move towards more economic co-operation.
"The eurozone has to work even more closely together but we also have to work together closely within the Europe of 27," she said.
"Our currency is not substantiated by a political union.
"Now the task is to make the euro strong through more economic co-operation and, especially, more commitment."
Earlier, her finance minister, Wolfgang Schauble, had also opposed the idea.
Mr Schauble said: "As long as we don't collectivise financial policy, we also cannot have a uniform interest rate level.
"The different rate levels are the incentive to run a solid economy or the punishment if you are not running it properly."
Writing in the German Press, Martin Blessing, chief executive of Commerzbank, said further steps were needed: "We need a real European finance minister, who is endowed with appropriate powers.
"With the introduction of a fiscal union, Brussels should have the right to take budgetary powers from countries that do not stick to the rules."
Among the proposals was a possible EU-wide financial-transaction tax, which has already stoked opposition in London, with Michael Spencer, the chief executive of Icap, the world's biggest interdealer broker, warning that it would "destroy the City and cost the Exchequer billions, but it would benefit Brussels".