GERMANY INSISTS NO EUROBONDS TO SOLVE EU DEBT CRISIS
(21 May 2012) France's new finance minister met his German counterpart for the first time on Monday as both countries underlined their desire to keep Greece in the eurozone. "We fully agree that we must stick to what we have agreed upon with Greece. We want to keep Greece in the euro system and we have to do everything to accomplish that," German finance minister Wolfgang Schaeuble said at a news conference in Berlin, after his first official meeting with Pierre Moscovici. Schaeuble added that Franco-German relations will remain essential to overcome Europe's turmoil. "In these critical times, we indeed need close cooperation", the German Finance minister said. Moscovici said he shared the view expressed by Schaeuble, stressing that Greece should remain in the eurozone, but that it must live up to its commitments. "We hope that a government will emerge from June 17th which is able to decide that Greece will remain in the eurozone, and takes care that Greece will fulfil its commitments," Moscovici said. Germany has again made clear its opposition to French proposals for jointly-issued bonds from the 17-nation eurozone as a way to create economic growth and ease the region's financial crisis. At Saturday's G-8 summit, German Chancellor Angela Merkel - under urging from US President Barack Obama and French President Francois Hollande - signed up to a statement that called for mixing painful cutbacks with growth-promoting measures to deal with a crisis that threatens the global economy. The leaders warned that budget deficits have to come down. But they also acknowledged that an approach that's based mostly on austerity and longer-term reforms can't help countries out of recessions this year or next. How exactly to encourage growth has become a controversial topic among European leaders, who will meet on Wednesday in Brussels to try to find common ground. Hollande has pushed for issuing debt backed by financially strong countries like Germany to finance growth in weaker countries like Greece or Portugal as one solution to the problem. Germany, however, has long and firmly resisted the idea of introducing eurobonds, arguing they would lessen pressure for heavily indebted countries to get their finances in order. They would also likely raise borrowing costs for countries in better shape, such as Germany. Schaeuble and Moscovici - representing the eurozone's two largest economies - both stressed that they seek a close cooperation in drafting Europe's policies in tackling the debt crisis. Hollande pledged during his election campaign to renegotiate the fiscal compact with a view to placing greater emphasis on growth. But when he visited Merkel last week he left open whether he will now stick to calling for a full renegotiation. Find out more about AP Archive: http://www.aparchive.com/HowWeWork Twitter: / ap_archive Facebook: / aparchives Instagram: / apnews You can license this story through AP Archive: http://www.aparchive.com/metadata/you...
