MORE: Merkel to Propose Common EU Budget at October Summi

Plan would replace structural cohesion funds with common EU budget to enable aid to stricken euro-area member states, Die Welt reported, citing unnamed EU sources. * Budget is priority for Chancellor Angela Merkel at Oct. 18-19 EU summit in Brussels * Aims to allow joint aid for member states against economic conditions * Funds could flow from national budgets, transaction taxes * France, Spain may see the proposal as diversion tactic * Germany wants to end debate over common euro bonds with proposal * MORE: States could welcome suggestion, if Germany makes concessions on areas including recapitalizing ailing banks via the European Stability Mechanism

To contact the reporter on this story: Jeff Black in Frankfurt at jblack25@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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