European Leaders Beginning Two Day Economic Summit in Brussels

Posted June 28th, 2012 at 4:45 am (UTC-5)
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Leaders of Spain, Italy and France are arriving at the start Thursday's European Union summit in Brussels with a common concern, urging Germany to do more to ease the financial hardships of the currency bloc's weaker governments.

German Chancellor Angela Merkel met with French President Francois Hollande in Paris Wednesday ahead the summit. Merkel is reported to have agreed to include growth items on the agenda favored by Mr. Hollande.

Spanish Prime Minister Mariano Rajoy is warning that his government will not be able to sustain its high borrowing costs for much longer.

Mr. Rajoy told the Spanish parliament Wednesday that European leaders need to adopt strong banking and fiscal ties when during the two-day summit.

Merkel has told her parliament that Germany can only do so much and that austerity spending measures remain the key to improving government finances.

Chancellor Merkel says Germany is a growth engine and a stabilizing anchor in Europe. But even Germany's strength is not unlimited. She said “We must not over-strain Germany's strength.''

Some eurozone leaders are calling for the sale of eurobonds, supported by the entire currency bloc. But Ms. Merkel remains adamant in her opposition because they likely would increase Germany's borrowing costs.

She also says eurobonds would be “economically wrong and counterproductive”.

European leaders expect to outline a road map to addressing concerns of the struggling economies by the conclusion of the Brussels summit, Friday.