Merkel: Eurobonds would repeat old mistakeJune 27, 2012: 10:30 AM ET
As European leaders gear up for a two-day summit in Brussels, German Chancellor Angela Merkel made her anti-eurobond stance crystal clear.
"To force one single interest rate by means of eurobonds politically, which already have not worked on the markets, would be repeating of an old mistake and not the lesson learnt from experience," said Merkel, speaking in front of Germany's Lower House of Parliament Wednesday.
The idea of eurobonds, which would essentially pool the debt of the 17-nation eurozone, has been floated around since last fall. And Merkel hasn't wavered in her opposition to the bonds, which would likely lower rates in the more troubled sovereigns but result in higher rates for stronger countries like Germany.
Still, the stakes are pretty high for leaders to come to some sort of a consensus and put a plan into action to once and for all to get Europe back on solid footing.
"There are no hard and fast solutions," said Merkel. "There is no magic formula or a decisive strike to overcome the sovereign debt crisis."
Germany, the largest and strongest eurozone country, has been under pressure to take the lead in solving Europe's crisis, but Merkel says the country can only do so much.
"The strength of Germany is not without limits," she said. "If we can overcome the crisis for good, we can only understand it as a challenging process of small steps and measures, which will tackle the problem at its roots.">
Analysts say it's not just Merkel who appears unwilling to budge. "Her insouciance is characteristic of a more widespread complacency among euro area leaders," said Chris Scicluna, head of economic research at Daiwa Capital Markets, in a research note.
The EU summit, which begins Thursday, will not likely yield the silver bullet Europe's debt crisis needs. Coincidentally, Germany will play Italy in the semifinals of the Euro 2012 soccer tournament on Thursday as well. Germany has already vanquished Greece on the pitch and if it beats Italy, it will play another member of the debt-laden PIIGS (either Spain or Portugal) in the finals on Sunday.
Here's hoping that the EU summit will at least move the ball forward, rather than kick it out of bounds.