German Chancellor Angela Merkel and French President Nicolas Sarkozy may announce proposals that “go in the direction” of joint euro-area bonds, said Peter Bofinger, an economic adviser to the German government.
“Merkel and Sarkozy have to do something against this” market uncertainty when they meet in Paris today, Bofinger said in an interview on Bloomberg Television. “They cannot end this day empty handed. I think they have to deliver something.”
There is “no alternative” to the introduction of euro bonds to counter the market turmoil that has spread to Italy and Spain, Bofinger said.
“I don’t think we will have euro bonds by the end of this day,” he said. “But I think they will show a commitment to go in this direction.”