Germany and France told euro-area laggards to make their economies more competitive to help overcome the debt crisis, pledging to do whatever necessary to defend the currency at a European Union summit next week.
The euro traded at 1.3212, down 0.0027 cents, at 3:37 p.m. in Berlin. The single currency has fallen 7.8 percent this year.
The euro’s survival is “non-negotiable". “If the euro fails, Europe fails,” Merkel told reporters in the southwestern German town of Freiburg, calling for more economic “coherence” in the euro region. “We must find a way to overcome the gap in competitiveness,” she said. “It’s not a job for next Friday” at the EU summit “but for the future.”
They ruled out joint bonds and rejected any increase in the size of the 440 billion-euro ($583 billion) rescue fund set up in May. “Common bonds would make governments less responsible, when what we want to do is the opposite,” Sarkozy said. Both leaders also rejected any increase in the rescue fund set up to stem the contagion spreading from Greece.
“We will do what is necessary to defend the euro,” said Sarkozy.
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