Hollande, Merkel Set for Eurobond Showdown

New EU dynamic expected to cause friction at crisis summit
By Rob Quinn,  Newser Staff
Posted May 23, 2012 4:20 AM CDT
Hollande, Merkel Set for Eurobond Showdown
Francois Hollande talks with Angela Merkel during the NATO summit in Chicago earlier this week.   (AP Photo/Carolyn Kaster)

Yet another European Union crisis meeting will be held today, but the dynamic has changed since the days when Angela Merkel and Nicolas Sarkozy met ahead of time to fix a strategy. Unlike his predecessor, François Hollande has sided with European leaders calling for growth instead of austerity and supporting sales of "eurobonds" backed by all member states to lower borrowing costs for struggling nations like Italy and Spain, Reuters reports.

Hollande, with support from Italian Prime Minister Mario Monti, is expected to argue firmly in favor of eurobonds at the summit, setting the stage for a showdown with his German counterpart, who is supported by the Netherlands, Finland, and Austria. Issuing joint bonds would do a lot to calm market panic in the EU, but the move would raise Germany's borrowing costs, and go against its approach to the crisis, which stresses the need for individual countries to get their finances in order, notes the Guardian. (More eurobonds stories.)

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