German Chancellor Angela Merkel rejected joint euro zone bonds Thursday as absolutely wrong and said restoring stability to the single currency bloc required a longer-term, step-by-step approach.
We must, and this is the lesson, move away from a debt union and toward a sustainable stability union. This won't be easy but it is right, Merkel said in a speech at the Frankfurt auto show.
This can't happen overnight, with some sort of one-off big-bang solutions. It can only happen in a controlled, step by step process, she said. Eurobonds are absolutely wrong. In order to bring about common interest rates, you need similar competitiveness levels, similar budget situations. You don't get them by collectivizing debts.
(Reporting By Madeline Chambers and Sarah Marsh in Berlin, Writing by Noah Barkin)