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'No magic formula' - Merkel warns ahead of EU summit

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'No magic formula' - Merkel warns ahead of EU summit


German Chancellor Angela Merkel is resisting mounting pressure from France, Spain and Italy to agree to pool eurozone debt.

With European leaders showing increasing signs of divergence ahead of an EU summit on the financial crisis, she insisted joint control must come before joint liability.

Referring to the push for euro bonds, she told German lawmakers: “There are no quick or easy solutions. There is no magic formula with which the debt crisis can be overcome once and for all.”

But she also sought to mollify Rome and Madrid who say they are pushed to the limit by austerity measures and need more help from their euro partners.

“Italy under Mario Monti has embarked on a path of solid public finances, growth, employment and competitiveness. Spain under Mariano Rajoy and his government has introduced important reforms in the past six months,” she said.

That could signal Berlin is edging a little closer to the French demand for austerity measures to be accompanied by growth initiatives.

She also gave some ground on a financial transactions tax proposed by 10 eurozone countries, saying the funds could be used to boost growth in struggling economies rather than going straight to the countries where they are levied.

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