Euro zone bond debate raises pressure on Merkel

(Reuters) – One of Germany’s leading economic associations came out in favor of joint euro zonebond issuance on Monday, raising pressure on Chancellor Angela Merkel to consider bolder crisis steps ahead of a meeting with the French president.

Until now, the idea of so-called “Eurobonds” has been fiercely opposed by Berlin, which is fearful such a step would push up German borrowing costs and reduce incentives for weaker euro zone members like Greeceto reform their economies.

A German government spokesman was emphatic — Merkel and France’s Nicolas Sarkozy will not discuss common euro zone issuance in Paris on Tuesday because Berlin does not think it is a good idea.