Top eurozone leaders pledge growth measures | News | DW | 22.06.2012
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Top eurozone leaders pledge growth measures

The top eurozone leaders have agreed to implement measures to boost economic growth in Europe. But differences remain on the thorny issue of eurobonds.

The leaders of Germany, France, Italy and Spain vowed to mobilize hundreds of billions of euros to implement new growth measures at a meeting in Rome on Friday.

French President Francois Hollande said after the talks that the leaders had agreed to invest "one percent of European GDP, that is 120 to 130 billion euros ($150 billion - $162 billion), to support growth."

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Italian Prime Minister Mario Monti told a joint news conference: "Growth can only have solid roots if there is fiscal discipline, but fiscal discipline can be maintained only if there is growth and job creation."

The growth measures include increasing the European Investment bank's capital, redirecting unspent EU regional funds and launching project bonds to co-finance major public investment programs.

Speaking after the 100-minute talks in the Villa Madama overlooking the Italian capital, German Chancellor Angela Merkel endorsed the growth packet, calling it "the right signal."

"The lesson of this crisis is more Europe, not less Europe," Merkel said.

"We need to work closer together politically, especially in the eurozone. Whoever has a common currency must also have coherent policies. That is also a lesson from the last two years," Merkel went on.

Spanish Prime Minister Mariano Rajoy said the four had agreed "to use any necessary mechanism to obtain financial stability in the euro zone."

Divisions remain

Despite Merkel's call for more coherence, however, differences remain, particularly on the issue of eurobonds.

Merkel has insisted that members of the 17-nation currency union must transfer control over national budget and economic policies to Brussels before Germany would consider common debt issuance.

In an apparent challenge to the chancellor, however, Hollande said: "I consider eurobonds to be an option ... but not in 10 years. There can be no transfer of sovereignty if there is not an improvement in solidarity."

Such rifts are likely to remain a stumbling block at a full EU summit scheduled for next Thursday and Friday.

The summit is expected to take the first steps towards a closer and fiscal union as European leaders hasten to find ways of combating a two-year-old debt crisis that is threatening to engulf Spain and Italy.

Spain to request aid

Meanwhile, Spanish Finance Minister said on Friday the country would formally request eurozone aid for its banks on Monday.

Speaking after two days of talks with European counterparts in Luxembourg, De Guindos said: "We will submit next Monday the letter with the formal request for aid."

Madrid says the banks need up to 26 billion euros ($78 billion) to survive a severe financial slump.

tj/jlw (AFP, Reuters, dpa)

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