German eurobond opposition won't change by June: official

(BERLIN) - Germany remains fundamentally opposed to the introduction of eurobonds and this will not change despite growing pressure on Berlin to alter its stance, a government source said Tuesday.

"This is not a new discussion ... we think it is the wrong way," the source told reporters ahead of an EU summit on Wednesday. "This is a fundamental position and it also won't change by June," the following EU summit, he added.

The official, who requested anonymity, added: "In this respect, I do not see eurobonds as a topic for the dinner" of EU leaders, to take place in Brussels on Wednesday.

However, a second source acknowledged that if other leaders wanted to discuss the issue, then Germany "would give its opinion."

"There is no legal basis for eurobonds. They are even explicitly forbidden" in the EU treaties, the source said.

New French President Francois Hollande is pushing eurobonds -- the pooling of the debt of eurozone countries -- as a solution to the crisis.

But Chancellor Angela Merkel fears both that this would push up Germany's ultra-low borrowing costs and reduce the incentive for fiscal sinners to balance their books.

The source denied there was any conflict with Paris on this issue. "I don't now believe there is any conflict with France," he stressed.

The official drew a sharp distinction between eurobonds and project bonds -- drawing on EU funds for specific investment activities in struggling member states.

"They have nothing, absolutely nothing, to do with each other. Just because they are both called 'bonds' doesn't mean they have anything to do with each other," he added.

European Union president Herman Van Rompuy has called for a "no taboos" debate and the newly elected French government has said that "everything should be on the table" amid rising opposition to the German-led anti-crisis strategy.

However, the German official played down the importance of the talks, saying: "Let me tell you what this summit is not: it is not a decision-making summit. It is not a special summit on Greece.

"It is just that a lot of stuff has happened since the EU leaders last met in March and the summit is to prepare the summit which will really be a decisive meeting in June," the official said.

He said there would be no special statement on Greece, although leaders were expected to discuss "the current situation" in the eurozone.