Belfast Telegraph

New bid to solve euro debt crisis

By Sean O'Grady

Another attempt to end the eurozone debt crisis and persuade the German chancellor Angela Merkel to accept eurozone bonds - pooling all the existing nations' national debts - was due to be made by President Sarkozy at a crisis summit today.

It comes against a backdrop of worried investors throughout the world despairing at the lack of political leadership being shown in the world's various sovereign debt crises. Second-quarter growth figures are announced for the eurozone this week.

Meanwhile, the Italian finance minister Giulio Tremonti, fresh from imposing another austerity programme, stepped up his calls for a more coordinated response to the eurozone debt crisis, including the creation of euro bonds or eurozone bonds.

Mr Tremonti was one of the first to come up with the idea, together with the chair of the eurozone group of finance ministers, the Luxemburger Jean-Claude Juncker.

Mr Tremonti argued at the weekend that jointly issued bonds would effectively make individual governments' debt a common burden, and said they were the "master solution" to the euro zone debt crisis.

The shock news last Friday that France's economic recovery has shuddered to a halt, with zero growth in the second quarter, has also undermined confidence in the French government's ability to control events. If the second largest eurozone nation were to come under the sort of pressure suffered by Greece, Portugal and Ireland, then few would give the single currency surviving in anything like its current form.

Mr Tremonti said there were "strong expectations" hanging over the encounter between Merkel and Sarkozy: "A lot depends on the choices which may be made about Europe and for Europe in the coming days."