Financial Post | Business

By Andreas KrJoner

FRANKFURT — German Chancellor Angela Merkel bluntly rejected eurozone bonds on Thursday as a solution to the currency area’s sovereign debt crisis, saying that “collectivising debts” would not solve the problem.

The European Union’s top economic official, meanwhile, said he expected international lenders to be able to recommend by the end of the month releasing a vital next tranche of aid for Greece, warding off the threat of an imminent default.

Spain and France both found good demand for their bonds at auctions, but while Paris’ short-term borrowing costs fell, Madrid had to pay dearly to sell longer-term debt despite support from the European Central Bank in the secondary market.

Speaking a day after the head of the European Commission raised financial market hopes by pledging to present options soon for issuing such common bonds, Merkel said: “Eurobonds are absolutely wrong.

”In order to bring about common…

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