It's decision time for the eurozone, and European leaders are reportedly set to work with the European Central Bank to demonstrate their commitment to the stability of the euro.
European leaders are expected to decide in the next few days what measures they will take to stem the Spanish bond yield crisis, according to Eurogroup head Jean-Claude Juncker, who told two newspapers on Sunday there is "no time to lose."
Juncker talked with Germany's daily Süddeutsche Zeitung and France's Le Figaro.
"I have no doubt that we will implement the agreements of the last summit. We still need to decide what we will do when. That depends on the developments of the next days," Juncker said.
Leaders show support
In recent days, European leaders have been pledging their support for the eurozone in a public offensive to stem Europe's crippling debt problems.
German Chancellor Angela Merkel talked by phone with Italian Prime Minister Mario Monti over the weekend, expressing her commitment to do whatever is necessary to defend the eurozone.
The German and Italian leaders discussed the euro crisis on Saturday, Merkel's spokesman revealed Sunday.
"They agreed that Germany and Italy would do everything to defend the eurozone," Merkel's deputy spokesman, Georg Streiter, said. The leaders also vowed to implement EU summit decisions from June "as quickly as possible."
Possible steps forward
The June 28-29 summit decided that nations with exemplary budget management were entitled to support from the European Financial Stability Facility (EFSF) and its successor, the ESM. Officials said this could include the EFSF buying national bonds to force yields lower.
Sunday's statement from Merkel and Monti echoed that made by Merkel and French President Francois Hollande on Friday, as well as one made by European Central Bank (ECB) President Mario Draghi a day earlier. On Thursday, the ECB suggested it may shore up the government bond markets of nations at the center of the crisis.
European leaders are responding to the resurgence of the euro crisis this month, which has driven up yields on Italian and Spanish bonds. French media said Hollande was seeking Berlin's support for the ECB to also make bond purchases.
Merkel has been wary in the past of such ECB intervention. Streiter gave no hint as to whether Merkel has shifted her stance in light of her latest chat with Monti.
Actions expected soon
Though no specific actions were mentioned by Merkel or Monti's offices, the statement raised expectations that the ECB might step in to buy Spanish and perhaps Italian government bonds to lower the countries' borrowing costs.
Another possibility is that the eurozone's temporary rescue fund, the European Financial Stability Facility, could buy bonds.
Either way, recent statements of support for the eurozone have led many to believe that action will soon be taken, as stated by Juncker.
tm/ccp (AP, dpa, Reuters)