Germany and France are set to rule out creating common eurozone bonds to solve the bloc’s current debt crisis, media reports said on Monday.
Chancellor Angela Merkel and President Nicholas Sarkozy will meet in Paris on Tuesday to discuss possible solutions.
The Financial Times quotes senior German and French officials as saying both governments are opposed to pooling the national debts of the 17 single currency nations.
EU leaders have spent the past eighteen months trying to shore up debt-laden economies of Greece, Ireland and Portugal.
Meanwhile, investor fear that French banks are heavily exposed to sovereign debt has pushed up borrowing costs for lenders across the continent.
European stocks slid last week as disappointing economic data spurred speculation that France would follow the US in losing its AAA credit rating.