Angela Merkel under pressure to sign up to eurozone stimulus plan

 

European Union leaders will tonight pledge to give greater priority to securing economic growth as they increase the pressure on Germany to do more to solve the eurozone crisis.

At an informal dinner in Brussels, several leaders will acknowledge the need for an EU "growth pact" after critics warned that Europe's "collective austerity" is stifling growth in the 27-nation bloc. The change of tone follows the election of the Socialist François Hollande as President of France, who will be attending his first EU summit.

But Angela Merkel, the German Chancellor, is expected to rebuff Mr Hollande's plan for eurozone nations to issue jointly guaranteed eurobonds to allow them to borrow more. Ms Merkel insists that it is not the right time to reduce the pressure on euro members to cut their deficits.

David Cameron backs eurobonds and is expected to side with the pro-growth lobby inside the EU despite sticking to his deficit-reduction strategy in Britain and rejecting calls for a Plan B to jumpstart the flatlining economy.

Yesterday George Osborne, the Chancellor, said the eurozone was reaching a "critical point". He added: "Eurozone countries need to stand behind their currency or face up to the prospect of Greek exit, with all the risks that that could involve. The British Government is doing contingency planning for all potential outcomes. It is our responsibility to ensure that while we work for the best, we prepare for something worse."

EU leaders are unlikely to take any major new initiative on Greece's debt crisis ahead of the country's second election on 17 June. Their key decisions on the "growth pact" and Greece will be put off until their next summit on 28 and 29 June. But Greece could potentially benefit from a European Commission plan to pilot EU "project bonds" to finance cross-border infrastructure schemes on transport, energy and communications. Some €230m (£185m) of EU money could unlock up to €4.6bn of investment. EU leaders will also discuss plans to hand another €10bn to the European Investment Bank to boost growth and jobs.

Herman Van Rompuy, the European Council president, who will chair tonight's talks, signalled the change of gear by saying the EU had to "ensure that fiscal consolidation and growth mutually reinforce each other". In a letter to the 27 leaders about the meeting, he hinted at support for eurobonds by saying: "There should no taboos concerning the longer-term perspective."

Christine Lagarde, the managing director of the International Monetary Fund, said during a visit to London that eurobonds could eventually play a role but understood Germany's reluctance to pool eurozone debts. She said: "The country that would carry the burden would be countries such as Germany and it's certainly understandable that Germany would want to receive in consideration for that sharing of liability significant commitment to improve productivity to structural reforms so it does not continuously carry the weight of the entire zone."

Alexis Tsipras, the leftist leader in Greece, hit back yesterday at claims by Mr Cameron, who has told Greeks that it is now time to decide whether they want to remain part of the single currency by voting for pro-bailout parties in the country's general election next month.

Speaking in Berlin, on the second day of a tour around Europe for talks with other left-wing leaders, Mr Tsipras said that a rejection of the harsh austerity measures imposed by Athens's pro-bailout parties would not automatically mean expulsion from the euro.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
filmPoldark production team claims innocence of viewers' ab frenzy
Life and Style
Google marks the 81st anniversary of the Loch Ness Monster's most famous photograph
techIt's the 81st anniversary of THAT iconic photograph
News
Katie Hopkins makes a living out of courting controversy
people
News
General Election
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Office Administrator

£14000 - £18000 per annum: Recruitment Genius: An Office Administrator is requ...

Recruitment Genius: Sales Executive - Commercial Vehicles - OTE £40,000

£12000 - £40000 per annum: Recruitment Genius: Due to expansion and growth of ...

Ashdown Group: Senior PHP Developer - Sheffield - £50,000

£40000 - £50000 per annum: Ashdown Group: Senior PHP Developer position with a...

Recruitment Genius: Operations Leader - Plasma Processing

Negotiable: Recruitment Genius: An Operations Leader is required to join a lea...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders