Neighbours meet in advance of Brussels summit

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Neighbours meet in advance of Brussels summit

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Like the debt crisis Europe’s leaders are constantly on the move. German Chancellor, Angela Merkel and French President Francois Hollande met in Paris before travelling to Brussels, the next stop and the EU summit.

Will that meeting bring a halt to the growing problems highlighted as Spain said it can’t continue financing itself indefinitely at current rates.

“We are conscious of the measures we have to prepare for financial stability and we both want to go into the economic and monetary policy in greater depth on Thursday in order to achieve integration and solidarity,” said Francois Hollande, President of France.

Support for the French president came in a phone call from US President Obama. But will he also get the backing of his neighbour?

“I say we need more Europe and I think that we agree on that, we need a Europe that works – this is what the markets look at. And we need a Europe where one country helps another, this is the spirit in which we work. Thank you for the invitation to Paris,” said German Chancellor, Angela Merkel.

Those words came after her address to the German Parliament on Wednesday morning when the Chancellor ruled out the idea of pooling eurozone debt through bonds and urged greater competitiveness in the EU. She said eurobonds were, “the wrong way” and “counter-productive”.

Analyst Nick Parsons, Head of Markets Strategy, National Australia Bank summed up the stance with an analogy. “The analogy I would use here is that between allowing someone to use your credit card and allowing them to use a prepaid card for spending. And I think what Miss Merkel is seeking actively to avoid is giving Germany’s credit rating to someone else to do what they will with.”

Demonstrators calling for the implementation of a tax on financial transactions as one remedy could get their way. Chancellor Merkel gave some ground on the idea saying the funds could be used to boost growth in struggling economies.