France and Italy leaders promote growth; Berlin says we won't pay

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France and Italy leaders promote growth; Berlin says we won't pay

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French President Francois Hollande has continued to talk up growth on a visit to Italy, currently suffering a sharp economic slowdown.

Hollande presented Italian leader Mario Monti with his “Growth Pact for Europe”, a document that French newspaper Le Monde says is being distributed around the continent’s capitals in time for the next EU summit at the end of the month.

The paper includes plans for the launch of controversial eurobonds, debt that is guaranteed by the 17 member eurozone bloc, rather than individual states.

Meanwhile Monti’s government will present a so-called “growth decree” on Friday of measures aimed at boosting employment and domestic spending.

But German Chancellor Angela Merkel has insisted that growth can’t be funded with new borrowing.
In a speech to the Bundestag, she refused to use Berlin’s financial power to solve the crisis.

“If the Euro fails, Europe fails,” said Merkel. “But we also know that Germany’s strength is limited. Therefore we have the responsibility, as the strongest economy in Europe, to assess our strength credibly.”

Hours before Hollande’s arrival in Italy, hundreds of protesters gathered outside the Rome parliament in a spontaneous demonstration.

Activists say they’re angry over the government’s plans for additional austerity measures.

Italy’s cost of borrowing on the financial markets held at a six month high of about 6 percent, making servicing debt more expensive at a time of deep recession.