Franco-German clash over eurozone recovery tactics rules out defining deal

PanARMENIAN.Net - A Franco-German clash over eurozone recovery tactics has ruled out a defining deal to solve the growing economic crisis at the latest EU summit in Brussels on Thursday, June 28, Belfast Telegraph said.

Eve-of-summit talks in Paris between the eurozone "big two" failed to bridge the gulf between German chancellor Angela Merkel and French president Francois Hollande over the balance between austerity and growth.

The pair agreed on the need for a 130 billion euro (£104 billion) "compact for growth" expected to be adopted by all 27 leaders at the summit.

But Germany is resisting the idea of "mutualisation" of eurozone debt - pooling the debt burden to lower the risk. Mrs Merkel wants bailout nations to meet tough new budget controls first and even then is reported to have ruled out anything more than taking a partial debt burden, saying: "I don't see total debt liability as long as I live."

The stand-off spotlights the key summit question: what strategy now will keep markets calm and give the EU a breathing space to get growth and jobs back on track?

EU officials said one crisis meeting among so many could not solve the problem, but summit chairman Herman Van Rompuy said in a letter to EU leaders: "The challenge for this European council (summit) is, more than ever before, to signal in a clear and concrete manner that we are doing everything required in response to the crisis."