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Merkel: eurobonds do not stimulate growth

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(BRUSSELS) - German Chancellor Angela Merkel reiterated her strong opposition to eurobonds on arriving at an EU summit Wednesday, saying they would not help to bolster growth in the struggling eurozone.

"I believe that they are not a contribution to stimulating growth in the eurozone" Merkel told reporters, adding that they were also explicitly forbidden by EU treaties.

"I note the legal framework. The treaties do not allow member states to take over the debt of other members," she said.

She said Wednesday's meeting would not be a "decision-making" summit, but a preparatory debate for the next EU summit in late June.

Germany has come under increasing pressure to drop its opposition to eurobonds, which several eurozone countries, led by France's new leader Francois Hollande, believe would be a neat way out of the crisis.

Berlin fears that bundling together the debt of strong eurozone countries like Germany with weaker states such as Spain would result in sharply higher borrowing rates for the German economy.

Merkel has also repeatedly said that eurobonds would reduce the incentive for countries with high debts and public deficits to implement the necessary reforms to get their public finances back in order.

Her comments put her on a collision course with Hollande, the main cheerleader for eurobonds, who told reporters on his arrival at the summit that "I think it is important that we can say what we think."

She said she would be concentrating on three main topics at the summit: deepening the internal European market, structural reforms and better use of the European Investment Bank.

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