The hotly-contested issue of eurobonds is likely to top the agenda at a summit of EU leaders in Brussels on Wednesday, with German Chancellor Angela Merkel maintaining her objection to them.
The Organization for Economic Cooperation and Development did a good job explaining what's at stake at the European Union summit with Tuesday's report that said a eurozone recession is the single biggest threat to the global economy.
It will be no trifling task, then, for the 27 EU leaders gathering Wednesday in Brussels to come up with ways to keep the debt crisis the bloc is facing from spiralling out of control, all while attempting to create jobs and boost the economy.
Following a European drive of austerity that was led by France and Germany over the past several months, Europe may now look toward policies that promote growth - a transition that will not likely be smooth.
One item of contention among the EU leaders is the idea of eurobonds, which would be jointly issued and could protect debt-laden countries like Spain or Italy by shielding them from high borrowing rates.
EU President Herman van Rompuy has encouraged "innovative, or even controversial, ideas" at Wednesday's meeting. German EU Commissioner Günther Oettinger said ahead of the meeting that he would advise EU leaders "not to rule out eurobonds fundamentally" in an interview with the daily Handelsblatt.
Recently-elected French President Francois Hollande also supports eurobonds.
But German Chancellor Angela Merkel is staunchly against the idea, fearing the eurobonds would only push up the current rock-bottom interest rates for Germany.
"This is a fundamental position and it also won't change by June," a government source told reporters on the condition of anonymity. The next crisis summit for EU leaders is set for June.
Jointly funded programs
On Tuesday, the EU approved a capital-raising scheme which is meant to back large-scale infrastructure programs across the 27-nation bloc. The idea behind it is the provision of so-called project bonds to lower business risks.
The EU Presidency, currently chaired by Denmark, announced that 230 million euros ($293 million) would be earmarked from the EU budget to cover some of the risks that are usually taken by the bloc's lending arm, the European Investment Bank (EIB) when providing loans for infrastructure projects.
It became clear that the project bonds would have nothing to do with jointly issued eurobonds, which would involve sharing the liability of the bonds across the bloc in addition to pooling resources to finance them.
mz,hg/msh (AFP, AP)