France and Germany's leaders face a stark choice in talks today (16 August) over whether to steer the embattled euro zone towards closer monetary union or risk watching the bloc unravel.
French President Nicolas Sarkozy and German Chancellor Angela Merkel are meeting in Paris to discuss what further measures they can take to contain Europe's debt crisis, which is now spreading to the continent's core.
Italy has been forced to ramp up its austerity measures and financial market jitters hit France last week, with French banks' shares subject to panic selling on rumours that the country could be next to lose its prized AAA debt rating.
Many experts say the only way to ensure affordable financing for the bloc's most financially distressed countries would be for the euro area to issue joint eurobonds – although officials in Paris and Berlin said Tuesday's talks would not address that possibility.
Although the German government has long opposed the idea, support is beginning to emerge, with the country's export association saying on Monday that eurobonds may be the only solution to prevent the markets from launching new assaults on eurozone members.
For more: Eurobonds debate overshadows Franco-German summit | EurActiv
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