On Tuesday, German Chancellor Angela Merkel and French President Nicolas Sarkozy met to discuss the economic crisis facing the euro zone. After the meeting, the two set out joint proposals to strengthen the euro, but stopped short of introducing “euro bonds,” which would allow borrowing on behalf of all 17 of the euro’s member States. According to Bloomberg, the market responded unfavorably, seeking further refuge in United States Treasuries.
“The market was hoping for more,” Jason Rogan, director of U.S. government trading at Guggenheim Partners, LLC, a New York-based brokerage for institutional investors, told the news service. “It’s not that the euro bond is the cure-all for their issues, but the market is telling you it was hoping there would have been more of an urgency to attack the crisis.”
According to the article, adding to investor concerns was a report issued Tuesday showing that European economic growth slowed in the second quarter.
“Merkel and Sarkozy set out joint proposals to strengthen the euro including plans for all euro-area states to demonstrate a ‘verifiable commitment’ to anchoring debt limits in national law and a ‘euro council’ to be headed by European Union President Herman van Rompuy. They rejected expanding the 440 billion-euro ($633 billion) rescue fund,” the news service reported.
“Many key European nations share a common currency, but not a common debt load. That has to change. Now,” read an opinion piece for CNNMoney. “Think about it. The way that the EU currently operates is like a married couple with only two individual bank accounts and no joint account. I guess that could work for awhile. But you’re only asking for trouble in the long run if the finances are kept separate.”